How do you convert Cryptocurrency to cash? Can you sell your Cryptocurrency for cash? Read on to learn how to cash out Cryptocurrency here.
A cryptocurrency is a great option to have an alternate system of currency. If your cash loses value, you have cryptocurrency as a backup.
You can also use cryptocurrency as an investment. We have all been following the growth of Bitcoin and heard fantastic stories of people who became millionaires overnight with Bitcoin.
While Bitcoin and other cryptocurrencies may not have as rapid growth as before, they have become an accepted form of currency in many jurisdictions.
More people are investing in cryptocurrency. But have you ever wondered how to cash out cryptocurrency?
Cashing out cryptocurrency has many benefits. We can build our fiat capital by converting cryptocurrency to fiat currencies. We can also use it as a payment method for retailers that do not accept digital cash.
This guide will show you how to do this.
A Guide on How to Cash Out Cryptocurrency
Cashing out your cryptocurrency is a great way to build your capital. It can also make things easier when filing your taxes. If you do need to file tax returns and claim your cryptocurrency, you should create a pay stub to help calculate your wages.
Here’s how you can cash out your cryptocurrency:
1- Crypto Wallets
Firstly, you must ensure that your cryptocurrency is stored securely in a wallet. There are many web-based wallets that allow you to store and manage multiple cryptocurrencies in one interface.
You can also use hot wallets or cold wallets to store your cryptocurrency. Hot wallets are internet-based wallets. Cold wallets are hardware devices that can store your cryptocurrency. Another option is to have your public key and private key written down on paper – as long as it is kept safely!
Once your cryptocurrency is stored safely you can begin to cash out your portfolio.
2- Use a Crypto Exchange
The first option – and the simplest – is to use a crypto exchange to cash out your cryptocurrency.
You can use a service like Coinbase (among others) to receive your cryptocurrency. If you hold 10 Bitcoins and you want to cash out 2 Bitcoins, you should transfer these 2 Bitcoins from your current wallet to your Coinbase wallet.
Once your Coinbase wallet receives the cryptocurrency, you can automatically convert your cryptocurrency to cash and then transfer the money to your bank account.
3- Making Payments
At times, you may find yourself at a retailer that does not accept cryptocurrency. When this happens, you will need to find an alternate method of paying.
A great way to work around this is to use Crypterium. Crypterium is an app to transfer cryptocurrency to a bank card.
This works with any MasterCard and within minutes your cryptocurrency will be converted to cash and made available for use. Only a small commission is taken from Crypterium.
All you have to do is install the Crypterium app on your phone and create an account. Once your account is made, you can transfer your Bitcoin or other available cryptocurrencies to your Crypterium account.
Once your cryptocurrency has arrived in your Crypterium account, you enter the card number of your MasterCard. Once you enter your card number you choose the amount of money to be transferred to the card. Within a few seconds, the commission will be taken out and the money will be transferred to the card.
4- Peer to Peer Exchange
Another way of converting cryptocurrency to cash is to use a Peer to Peer exchange.
Often broker exchanges can take up to 3 business days for you to receive your converted crypto. Peer to Peer exchanges will allow you to trade your cryptocurrency to fiat currency with someone else (your peer).
There are a variety of options for these trades. You can choose a cash deposit option in which your peer deposits cash to your bank account. In exchange, you will send the equivalent in cryptocurrency to their crypto wallet.
If you opt for this option, make sure you ask your peer for their proof of ID and the proof of payment before you send them your cryptocurrency.
Another option is through bank transfer. Your peer can use wire transfer (or any other method) to digitally transfer money to your bank account. Once the money reaches your account, you can send them the equivalent in cryptocurrency. Again, you want to ask for their proof of ID so you know you are sending it to the right person.
A third option is to meet your peer in person. This does not require a peer-to-peer exchange. You can meet the person and have them hand you the cash or write a check. Then, you can transfer your cryptocurrency to their wallet.
However, we recommend using a peer-to-peer exchange as they will have an escrow service to ensure your security.
5- Receiving Cryptocurrency as Cash
A lesser-known option is to receive cryptocurrency as cash. Using a service such as Bitwage, you can automatically convert your cryptocurrency to a variety of fiat currencies before having them transferred to your bank account.
If your employer pays you 5 Bitcoins, you can choose to convert 2 Bitcoins into US Dollars, 2 Bitcoins into British Pounds Sterling, and the last Bitcoin into the Malaysian Ringgit!
Bitwage and other similar services will convert the cryptocurrency to your liking and then transfer the cash to your bank account.
6- Paying Taxes
As a final note, you may be required to pay taxes on your cryptocurrency earnings. If your jurisdiction requires this, it is imperative that you keep a record of the cash value of what you have earned.
You will have to keep a record of cryptocurrency earned as well as any payments (to staff) you make with cryptocurrency. We suggest speaking to a tax consultant on how much you are likely to pay from your cryptocurrency earnings.
Based on the tax consultants’ suggestions, you may wish to periodically withdraw the amount from cryptocurrency to fiat currency so that when tax season comes, you have the money set aside to pay your taxes.
Build Your Capital
Now that you know how to cash out cryptocurrency, you can build your capital and use your crypto to make payments.
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