How to Cash Out Bitcoin Instantly (2024) – Guidance and Tips

Bitcoin (BTC) has gained popularity day by day because it’s blockchain transactions. You can buy and sell your Bitcoin online, using it for purchases or as an investment.

But can you convert Bitcoin into cash safely? Yes, you can convert Bitcoin to cash using various methods. This article will help clear all your doubts.

Quick Insights

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What is Bitcoin?

Bitcoin created in 2009, is a type of digital money that isn’t controlled by any person or group. It’s created and traded using a technology called blockchain.

People use Bitcoin to buy things online or as an investment, hoping its value will go up over time. Buying and selling bitcoin is one way to acquire it.

You can get Bitcoin by buying it on websites or by “mining” it using powerful computers.

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How to convert Bitcoin to cash

Here’s a step-by-step method you can use to convert Bitcoin into cash. Choose the method that suits your needs.

Centralized exchanges (CEXs)

These websites where you can trade digital assets using cryptocurrency or regular money. They’re like traditional stock markets for cryptocurrencies, offering advanced features like margin trading and lending.

Step 1: Sign up and verify your identity

• Choose a centralized exchange platform like Coinbase, Kraken, or Binance that offers cryptocurrency exchanges.
• Sign up for an account and complete the identity verification process.

Step 2: Deposit Bitcoin into your exchange wallet

• Once your account is verified, deposit your Bitcoin into the crypto exchange wallet provided by the platform.

Step 3: Select fiat currency and amount to sell

• Navigate to the trading section of the exchange and choose the option to sell Bitcoin.
• Select the fiat currency (e.g., USD, EUR) you want to receive and enter the amount of Bitcoin you want to sell.

Step 4: Sell Bitcoin

• Place a sell order for your Bitcoin based on the current market price or set a specific price if you want.
• Wait for your sell order to be matched with a buyer.

Step 5: Withdraw cash to your bank account

• Once your Bitcoin sell order is executed, you’ll have fiat currency (e.g., USD) in your exchange account.
• Initiate a withdrawal request to transfer the cash from your exchange account to your linked bank account.

Step 6: Withdraw cash

• The cash will be transferred to your bank account within a few days, depending on the processing time of the exchange and your bank.

Crypto debit cards

It functions like a regular debit card but uses cryptocurrency instead of money from a bank account. They automatically convert your cryptocurrency into regular money for easy spending on everyday purchases.

Step 1: Get a crypto debit card

• Sign up for a crypto debit card from providers like Coinbase card, Crypto.com, or BitPay.
• Complete any necessary identity verification process.

Step 2: Deposit Bitcoin into your card

• Deposit Bitcoin into your crypto debit card wallet using the provided address or through the card provider’s platform.

Step 3: Use the debit card for transactions

• Once your Bitcoin is loaded onto the card, you can use it for everyday purchases at locations that accept debit cards.
• The card automatically converts Bitcoin to fiat currency at the time of transaction.

Peer-to-Peer (P2P) exchanges

These are exchange platforms where you can buy and sell Bitcoin directly from other users without intermediaries. They offer more privacy and support various cryptocurrencies and payment methods.

Step 1: Sign up on a Peer-to-peer exchange platform

• Choose a Peer-to-peer platform like LocalBitcoins, Paxful, or Bisq.

• Create an account and complete any identity verification required.

Step 2: Find a buyer

• Browse or search for buyers who are willing to purchase Bitcoin with cash.
• Check the buyer’s reputation, trade history, and terms of trade.

Step 3: Initiate the trade

• Initiate a trade with the selected buyer, specifying the amount of Bitcoin you want to sell and the payment method (cash).

Step 4: Complete the transaction

• Meet the buyer in person or follow the platform’s instructions for online transactions.
• Receive cash from the buyer and confirm the release of Bitcoin from your escrow account.

Bitcoin ATMs

Machines where you can buy or sell cryptocurrencies using cash. Similar to traditional ATMs, they’re often found in busy locations like stores and gas stations.

Step 1: Find a Bitcoin ATM

• Use a website or app like CoinATMRadar to locate a Bitcoin ATM near you.

Step 2: Sell Bitcoin

• Go to the Bitcoin ATM and select the option to sell Bitcoin.

• Follow the on-screen instructions to input the amount of Bitcoin you want to sell.

Step 3: Receive cash

• The Bitcoin ATM will dispense cash equivalent to the value of the Bitcoin you sold.

Gift cards

Vouchers that allow you to shop at specific stores using cryptocurrency. They’re a convenient way to use digital currency for purchases at places that don’t directly accept Bitcoin.

Step 1: Purchase gift cards

• Use platforms like Gyft, eGifter, or Bitrefill to purchase gift cards for various retailers using Bitcoin.

Step 2: Use the gift cards

• Once you have the gift cards, you can use them to make purchases at the respective retailers.
• The value of the gift cards will be deducted from your Bitcoin balance.

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How long does it take for Bitcoin to transfer?

Bitcoin transfers vary from instant to a few days depending on the method are:

• Centralized exchanges: It can take 1 to a few days to transfer Bitcoin to your bank account.
• Crypto debit cards: It’s almost instant because the conversion happens when you use the card.
• Peer-to-peer exchanges: It might take 1 to 3 days for the transfer.
• Bitcoin ATMs: Up to 10 minutes for the transfer to happen.
• Gift cards: It usually takes minutes to an hour for the transfer to go through.

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How to transfer Bitcoin to another wallet?

How to transfer Bitcoin to cash. By following these steps, you can safely transfer your Bitcoin to another wallet.

• Choose the right crypto wallet: First, pick a reliable Bitcoin wallet to send and receive Bitcoin. You can use a hardware wallet for extra security or a software wallet for convenience. Select one that fits your needs.
• Check the recipient’s address: Make sure you’ve got the correct wallet address of the person or wallet you’re sending Bitcoin to. Even a small mistake in the address can make you lose your Bitcoin forever. Some wallets have a QR code scanner to help you avoid errors.
• Think about fees: Watch out for the fees because they vary based on how busy the Bitcoin network is. Higher fees mean faster transfers, important for urgent transactions.
• Consider SegWit: Segregated Witness (SegWit) addresses can make transactions cheaper and faster. If your wallet supports it, it’s worth using.
• Review everything: Before you hit send, double-check all the details. Look at the recipient’s address, the amount of Bitcoin you’re sending, and the transaction fee.

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How to cash out Bitcoin without paying taxes?

There is no legal way to completely avoid capital gains taxes when cashing out Bitcoin. However, a few strategies can help you reduce your tax burden are:

• If you sell some of your cryptocurrency for less than you bought it, you can use that loss to lower the taxes you owe on any gains from other investments.
• You can put your cryptocurrency into a special retirement account. Depending on the type of account, you might not have to pay taxes on the growth of your investment until you take the money out when you retire.
• Instead of selling your cryptocurrency, consider borrowing money against it. cryptocurrency loans are usually tax-free, so you can access cash without selling your cryptocurrency.
• Some investors move to states or countries with low taxes to save money. States like Texas, Florida, Washington, Nevada, Wyoming, South Dakota, New Hampshire, Tennessee, and Alaska don’t have income taxes. Some countries, like Malta and the United Arab Emirates, don’t tax cryptocurrency either. Moving there can help investors keep more of their money.

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Conclusion

Converting Bitcoin to cash is feasible through various methods such as centralized exchanges, crypto debit cards, peer-to-peer exchanges, Bitcoin ATMs, and gift cards. Each method has its pros and cons in terms of speed, convenience, and security.

It’s essential to choose the method that aligns with your preferences and needs. Additionally, being mindful of transfer times and transaction fees ensures a smooth cash-out process.

Use strategies to minimize tax implications, and it’s important to adhere to legal requirements when cashing out bitcoin.