How to Convert Bitcoin to Cash
So you own bitcoin, and you want to turn it into cash? This article explains how to transfer BTC to your bank account.
Why Transfer Bitcoin to Your Bank Account?
In theory, you will one day be able to use bitcoin for any type of purchase. It will become a replacement for fiat currencies, like U.S. dollars, which will no longer be necessary. The idea that bitcoin will eventually replace fiat currencies is the reason so many people are investing in bitcoin now.
At present, however, the reality is that relatively few businesses or individuals will accept payment in bitcoin. That is one reason you may want to convert your BTC to cash—so that you can use the value of your bitcoin to buy actual things.
Another common reason for transferring BTC to a bank account is to cash out of bitcoin at times when the market is in decline. If you think the price of bitcoin is going to keep sinking and you want to protect yourself from losses, it makes sense to convert bitcoin to fiat currency while you wait for the bitcoin price to recover.
How Can You Move BTC to a Bank Account?
There are several possible ways to convert bitcoin to cash and ultimately move it to a bank account:
- Sell bitcoin on a cryptocurrency exchange, such as Coinbase or Kraken. This is the easiest method if you want to sell bitcoin and withdraw the resulting cash directly to a bank account.
- Use a bitcoin ATM. There are currently slightly more than 2,200 bitcoin ATMs spread around the world. If one happens to be located near you, you can use it to exchange bitcoin for cold, hard cash.
- Get a bitcoin debit card. Several websites allow you to sell bitcoin and receive a prepaid debit card in exchange.
- Sell bitcoin to friends. If you have friends who want to acquire bitcoin, you can sell yours to them in exchange for fiat currency. This method requires having bitcoin-seeking friends, of course, whom you trust to pay you for the bitcoin you send them.
Getting Started with Cryptocurrency
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Things to Remember about Converting Bitcoin to Cash
Before you go moving all of your BTC to a bank account, keep in mind the following pitfalls associated with converting bitcoin to cash:
- Taxes. Death and taxes are inevitable, even for bitcoin investors. Although some jurisdictions have yet to clarify their stance on bitcoin and taxes, most tax authorities say that you have to pay taxes on profits that you may make when selling bitcoin for cash. And lest you think you can simply ignore those rules, keep in mind that some bitcoin exchanges will report your profits to the tax man when you cash out.
- Fees. Most of the BTC-to-bank-account methods described above entail exchange fees. (Selling bitcoin directly to your friends may be an exception, assuming your friends are nice enough not to charge you transaction fees.)
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