The ever-growing popularity of cryptocurrencies, Bitcoin, in particular, has converted many investors and consumers alike to consider using the digital market’s alternative form of currency over more traditional means. One common misconception, however, is how hard it is to convert Bitcoin from its virtual state into cold-hard cash and vice-versa.
That being said, we here at NitroBetting came up with a list of the five most viable means for users to cash out their Bitcoin as necessary, as well as what one should expect in using these various means of conversion methods.
If you’re new to BTC, we suggest checking our Bitcoin guide first before diving into this article.
Five Common Ways to Convert Bitcoin to Cash
Listed below are the five best ways to convert Bitcoin into cash, in the order of which method is the most feasible for the average Bitcoin user. Several key factors were considered in coming up with these suggestions, such as ease of access, price of additional fees per transaction, and speed of expected turnaround times.
Not only is Coinbase one of the most well-known cryptocurrency exchange sites on the net, it’s also the most user-friendly and arguably also the fastest in terms of transaction speed.
Coinbase was one of the first companies to accept instant deposits and withdrawals via PayPal, making it all the more convenient for those already using the popular digital wallet for fiat currencies. The site does charge relatively more for each transaction compared to other means on this list (1.5% transaction fee using a bank account and up to 4% for credit cards), but the sheer ease and trust that Coinbase has built still puts it atop our recommendations.
Paxos Standard (PAX) is a terrific alternative for those who deal with cryptocurrency transactions more than the average consumer, as registered PAX users can easily convert their Paxos Standard tokens directly into US Dollars based on the USD value in real-time.
The downside to Paxos Standard is that trading Bitcoin for PAX tokens is required, adding another leg into the digital currency exchange process. Another is that since Paxos Standard follows the value of the US Dollar as it happens, transactions take much longer to process than other exchange sites. On the bright side, Paxos Standard does not charge a fee for converting PAX tokens into USD to make up for the added complexity in making use of their service.
Automated Teller Machines (ATMs) have been around for years, with traditional banks offering the fastest means to withdraw and/or deposit money without having to line up at the bank itself. Bitcoin saw this opportunity to gauge its exposure in the real-life market, with several banks now entertaining Bitcoin transactions as well to keep up with the digital currency trends.
While Bitcoin ATMs are obviously accessible to just about anyone, it does require Bitcoin users to open an account with a banking partner in order to be granted access to a particular wallet address wherein the digital funds can be retrieved. It’s also one of the more costly methods of conversion, as transaction fees can sometimes reach up to 10% per transaction.
Bitcoin Debit Cards
In terms of sheer convenience alone, Bitcoin debit cards are available for Bitcoin users who want complete access to their digital currency funds.
Early in Bitcoin’s inception and cryptocurrencies in general, availability of debit cards from third-party financial institutions were few and far in between. Now, there are much more third-party entities allowing the use of debit cards for Bitcoin, particularly in North America and Europe.
These debit cards afford its users a point-of-purchase conversion, directly converting Bitcoin to cash at any given transaction. Although, one must be wary of the conversion rate imposed by the debit card issuer. The volatility of the real-life currency market causes sudden spikes and dips in your Bitcoin trade depending on said conversion rate; not to mention that additional fees will also be tacked on to each transaction depending on the debit card issuer.
Peer-to-peer trading is the original method of exchanging cryptocurrencies before other technological advancements and more lenient regulations made way for the more convenient means as stated earlier.
The only fees associated with peer-to-peer transactions are the validation fees charged by the cryptocurrency’s blockchain itself, and with the price of the transaction as a whole being fully negotiable between the two parties involved.
The conversion process is also only as fast as that blockchain will allow. Thus, there are several sites such as LocalBitcoins assisting users in arranging any given transaction. Services such as LocalBitcoins will even hold Bitcoin in trust until the receipt of payment is finalized.
Check out other NitroBetting guides on Bitcoin, sports betting, and casino.