Bitcoin (BTC), the largest cryptocurrency in the world, can easily be converted to cash. There are many ways to convert Bitcoin to cash, including cryptocurrency exchanges, P2P platforms and Bitcoin ATMs, among other things. You can also use Bitcoin to buy things, as cash is merely a medium of exchange rather than a good with an intrinsic value per se.
Whether you want to sell or hold Bitcoin for longer periods of time, then this is going to depend on many factors. But we are not here to tell you what you should do with Bitcoin or not. In this guide, we are going to tell you what Bitcoin is, how it can be converted to cash and which mechanisms you can use to exchange BTC for your local fiat currency.
Disclaimer: this is not investment advice and all the information shared by UseTheBitcoin and its writers should be considered for educational purposes only.
What is Bitcoin?
Bitcoin (BTC), as you might already know, is the largest cryptocurrency in the world. It was created in 2009 by the anonymous figure Satoshi Nakamoto, who is now not participating anymore (at least with this pseudonym) in the cryptocurrency market.
Over the last decade, we have seen Bitcoin moving from below $100 per coin to over $69,000 in November 2021. The coin surged up to all-time highs a few months ago and analysts remain very bullish about the future of this coin.
Nowadays, Bitcoin has a market value of $750 billion and a price per coin of $39,750, according to data shared by CoinGecko. Thanks to this price expansion and the fact that Bitcoin is a decentralized virtual currency without the control of a centralized authority, it has been adopted not only by retail investors but also by companies and countries.
Large companies such as Tesla, MassMutual or MicroStrategy have added Bitcoin to their cash balances and could eventually add more in the future. This shows that Bitcoin has also attracted institutional capital rather than simply retail investors.
Another thing to take into consideration is related to the fact that Bitcoin has also been made legal tender in El Salvador. That means that El Salvador became the first country in the world that made Bitcoin the national currency (alongside the U.S. dollar). This has pushed the price of Bitcoin higher and it has created confusion among international financial organizations such as the International Monetary Fund (IMF) or central banks.
Bitcoin is a decentralized digital currency that cannot be controlled by a centralized government or organization. Thanks to this decentralization approach, Bitcoin is censorship resistant and permissionless. Every single person that wants to send and receive funds using the Bitcoin network can do so in minutes knowing that the transaction will reach the other wallet in just minutes.
Nowadays, there are many other virtual currencies in the market. However, we will focus on Bitcoin and how you can convert Bitcoin to cash in just a few simple steps.
Can Bitcoin be Converted to Cash?
Yes, Bitcoin can be converted to cash in many different ways. You can easily exchange your Bitcoin for your local currency or for other international fiat currencies that you desire. Depending on where you are located and the trading platform that you use, you might have different options to do so.
One thing that you should know is that you can convert Bitcoin to cash by following different steps. Depending on the type of method that you use, the steps will be different. There are three different ways in which you can convert Bitcoin to cash. These three options include using cryptocurrency trading platforms – also known as cryptocurrency exchanges, P2P trading platforms and Bitcoin ATMs.
There will be a multiplicity of factors that would change the profitability of spending the funds on one or another platform. Usually, the best thing to do is to select the cheapest and fastest method, but there are also other things to take into consideration, including privacy and availability of the withdrawal methods that you want.
Remember that Bitcoin is a highly liquid asset. That means that it should be relatively easy to sell it at market prices almost anywhere in the world. If you have an internet connection and you have a cryptocurrency exchange account open, then you should be able to convert Bitcoin to cash in just minutes.
When we talk about physical banknotes, there are other processes that should be involved. Let’s not forget that if we talk about physical banknotes, then the process could be more tedious. If you are using a cryptocurrency exchange, then there will be some type of interaction with traditional financial institutions (i.e. banks) that would work as intermediaries between the exchange and your bank account before you can withdraw your funds from a local ATM.
Instead, if you use Bitcoin ATMs, the process should be faster and easier, but transaction fees are also higher, which could end up creating some inconveniences for you. As you can see, it is possible to convert Bitcoin to cash in many different ways. That means that once you buy Bitcoin, you will be able to get cash through many of the available ways to do so.
Where can I buy Bitcoin?
Now the question is where you can buy Bitcoin. In the same way, as you can sell Bitcoin using different methods, you can also buy Bitcoin through cryptocurrency exchanges, ATMs and using P2P trading platforms. These are the easiest ways to purchase Bitcoin and get access to the largest cryptocurrency in the world.
Buying Bitcoin will require you to hold cash (local currency) and send it to a trading platform. If you are using a cryptocurrency exchange, then you can easily pay using debit or credit cards, bank transfers and third-party payment solutions. Therefore, you should hold your cash in a virtual form. Things become more complicated if you want to buy Bitcoin with cash, but this is not impossible. You have to decide whether you want to buy Bitcoin using banknotes or through an online platform.
Cryptocurrency exchanges are not only the easiest ways to buy Bitcoin but they are also offering many other services. That means that the value of using these virtual currency trading platforms is even larger than if you use an ATM or similar. You can get access to lending, borrowing, other virtual currencies, derivatives, blockchain platforms and many other things.
Depending on your needs and how easy it is for you to get access to those services, you can choose between any of the above-mentioned methods to buy and sell Bitcoin. Remember that you can also sell your coins using the same platforms that you used to buy Bitcoin. Hence, it becomes very useful and reliable to use the same platforms to buy and sell Bitcoin for cash.
Some of the largest exchanges in the world would not only offer you the possibility to buy and sell Bitcoin for just one fiat currency but they will have many fiat currencies supported. Therefore, the possibilities offered by these trading platforms are large and very useful for different investors in the market. This does not mean that other platforms or purchasing methods don’t work, however, they have different advantages and disadvantages that you should analyze before deciding to use them.
Where can I convert Bitcoin to Cash?
We are now in the last part of this post. The goal is to get into the details of the platforms that will let you convert Bitcoin to cash. There are many ways in which you can do so and each of these methods has its pros and cons. Understanding which are the advantages of each of these platforms would then let you select the best option for you to convert Bitcoin to cash.
Let’s start with cryptocurrency exchanges. They are now offering the easiest ways for investors to convert Bitcoin to cash. Is the easiest, fastest and most reliable way to convert Bitcoin to cash. Cryptocurrency exchanges are trading platforms that let you exchange Bitcoin for other virtual currencies. You can also exchange your fiat currencies for Bitcoin and other digital assets.
Therefore, you will be able to convert Bitcoin to cash in just a few simple steps using most exchanges in the cryptocurrency market. Not only this, you can easily get access to many different services that exchanges could offer to crypto investors and clients.
Cryptocurrency exchanges have been expanding all over the world in recent years. Since Bitcoin continues to be a demanded asset, it has been a normal thing to see new crypto trading platforms appear almost every single year. Some of them are more reliable than others, but many of them (especially large trading platforms) have added a wide range of payment methods for you to buy Bitcoin and convert Bitcoin to cash.
You can select a local crypto trading platform that supports your local currency or you can try to search for global (and usually more reliable) trading platforms that will support some global fiat currencies such as the U.S. dollar (USD), the Euro (EUR), the Japanese Yen (JPY) or the British pound (GBP), among others.
By creating an account in these cryptocurrency exchanges, you will also be able to convert Bitcoin to cash and withdraw your funds to your bank account or third-party apps such as PayPal and many others. It is up to you to decide which exchange to use according to the availability or your needs.
P2P Trading Platforms
Another popular method to convert Bitcoin to cash is using P2P trading platforms. These trading platforms are similar to cryptocurrency exchanges. The main difference is related to the fact that these platforms do not tend to have all the different solutions and services offered by traditional cryptocurrency trading platforms.
P2P trading platforms rely on individuals buying and selling Bitcoin directly between each other. That means that rather than the platform receiving the payment and allowing the user to buy Bitcoin and other virtual currencies from an order book, they would simply work as intermediaries between two individuals.
You can select a price at which to buy Bitcoin and you can get an offer. The payment method would also have to be agreed by the individuals on the platform. Usually, you can select a bank transfer as a payment method. But you can use many other types of platforms, including PayPal and third-party solutions that would be available in your location.
This is a smaller market with spreads that are usually larger between the offered price and the asked price. Therefore, these are more inefficient markets, but you can easily buy Bitcoin from another person and avoid the use of traditional cryptocurrency exchanges. If you like to use these types of platforms, you can convert your Bitcoin to cash in just a few simple steps.
You place a Bitcoin sell order and a user will contact you to send you a payment and receive their BTC. This can take a few minutes and the P2P platform will work as an escrow solution. In this way, both parties can be sure that the funds will be processed without having an issue with the payment.
In the past, P2P platforms allowed investors to meet personally with other people and purchase Bitcoin with cash. This was one of the easiest ways to convert Bitcoin to cash without having to use electronic payment methods. Due to KYC and AML procedures, this type of payment is becoming less common in the crypto community.
Finally, we have Bitcoin ATMs. These are teller machines that let people convert Bitcoin to cash as long as the ATM supports cash withdrawals. We are used to seeing some Bitcoin ATMs that do not support cash withdrawals, therefore, make sure that when you use an ATM they let you withdraw cash.
These ATMs look very similar to traditional cash ATMs but they let you buy and sell virtual currencies, including Bitcoin. These ATMs are located in different locations, shopping centres, malls, and other public locations. The goal is to offer a more direct way for investors to buy and sell virtual currencies.
Bitcoin ATMs are currently located in most countries around the world. However, the vast majority are in the United States and Canada. The European Union also has a large number of ATMs but is far from being a leader in the market.
The only negative point about ATMs is that they usually require you to show an ID and, in some cases, the spread is even larger than on traditional cryptocurrency exchanges. Usually, the teller machine will also add some fees to the platform, which makes things even more expensive.
That being said, each method to convert Bitcoin to cash is effective and an expression of how easy it is to get fiat money for your Bitcoin. The market is quite liquid and you will definitely find many solutions for you to convert Bitcoin to cash. There might be other ways to do so, but the goal of this post was to share with you many different methods to convert Bitcoin to cash, usually the most popular and reliable ones.