How to withdraw crypto or bitcoin
With the plunge in cryptocurrencies like Bitcoin in 2022, you might be wondering how to get out of your investment. Despite the downturn in the crypto market, the good news is that traders have a number of ways to get US dollars for their digital money, although some organizations have prevented investors from withdrawing crypto for real money.
If you sell an asset, you should understand the tax consequences. You may owe a package if you order a capital gain, and the tax rate will depend, among other things, on the retention period. Of course, you can claim a write-off if you sell at a loss. But if you think crypto can bounce back, it might be better to hold on and wait for the downturn.
Here are five ways you can withdraw crypto or Bitcoin.
1. Use an exchange to sell crypto
One of the easiest ways to withdraw your cryptocurrency or Bitcoin is to use a centralized exchange like Coinbase. Coinbase has a user-friendly “buy/sell” button and you can choose which cryptocurrency you want to sell and the amount.
You will quickly exchange cryptocurrency for cash, which you can access from your Coinbase cash balance. From there you can transfer the money to your bank account if you wish.
And while Coinbase is a popular option for selling cryptocurrency, it’s probably most useful to go with the exchange that currently holds your coins if you don’t have custody of the coins yourself. Some of the best exchanges include Binance, FTX and Kraken.
2. Use your broker to sell crypto
If a broker has your crypto coins, the easiest way is simply to go with that broker. For example, if you are a client of Robinhood or Webull, both of which allow extensive crypto trading, it will be easiest for you to just execute a trade on their platform and be done with it.
After you complete your trade, you will have the money in your account and be ready to trade again.
3. Join a peer-to-peer trade
You can also make a direct trade by selling your cryptocurrency directly to another person through another device. The most popular way is through a peer-to-peer online platform that allows sellers to find the best deals through an exchange, although one can even do it in person if needed.
With an online peer-to-peer trade, you can sell cryptocurrency online in exchange for dollars. These transactions are often facilitated by an exchange, and Binance operates a well-known online peer-to-peer platform called Binance P2P. After accepting a trade, the platform deposits your crypto. When you check the transaction record in the payment account and make sure that you have received the money from the buyer, Binance will release the crypto to the buyer on the platform.
Another popular option is the online platform Paxful. Sellers have the option to set their own prices and can choose from more than 300 payment options, such as cash, gift cards or other digital currencies. Customers can sell directly to over 3 million users worldwide, according to the platform’s website.
4. Withdraw money at a Bitcoin ATM
Cashing out at an ATM is the equivalent of selling your Bitcoin, says California Bitcoin ATM company Hermes Bitcoin. Bitcoin ATMs are a way to get instant access to cash using bitcoins. Bitcoin ATMs do not work like traditional ATMs. To make a cash withdrawal and sell your Bitcoin from the ATM, the machine provides a QR code to which you send your Bitcoin. You just wait a few minutes and receive your money.
However, the commissions on Bitcoin ATM trades can be hugely high, so it’s important to note how much you’re paying and whether it’s worth going a different route.
5. Exchange one crypto for another and then cash out
Some exchanges do not allow the conversion or sale of some cryptos to dollars, so you have to take an indirect route to get your money. Depending on which exchange you use, you may need to transfer or convert your cryptocurrency to another popular currency such as the stablecoin Tether before finally converting to dollars.
The bottom line
Traders have a variety of ways to sell their cryptocurrency. Popular crypto exchanges are always a good bet, as they are reliable and well-known, while online platforms with peer-to-peer sales can allow flexibility in payment. You can go the convenient route and use a Bitcoin ATM to get quick access to your crypto, but at a significantly higher commission.
