A quick yet comprehensive guide on converting crypto to cash - 2023

A quick yet comprehensive guide on converting crypto to cash

The blockchain-based digital currency that you know as the cryptocurrency only exists electronically. Presently, it has been able to capture the attention of both investors like you, and reputed corporate financial service firms.

After buying crypto, you have waited for a long time to sell it and earn a profit. Thus, without wasting further time, you should peek into the next step as soon as possible.

So your prime focus will be to convert the crypto to cash so that it is readily acceptable on various platforms and your purchasing spree is not hampered in any way. IF you are into Bitcoin trading, you may also consider knowing about Bitcoin and Leading Crypto Coin.

But before you indulge yourself in finding the way to convert digital currency to cash, you need to know certain facts that have been stated below.

Concept of cryptocurrency banking

You might be surprised to hear the term cryptocurrency banking. It is a pseudo name for the exchange companies and firms offering services through which you can manage your cryptocurrency balances.

You will be able to maintain a digital wallet from where you can spend the cryptos you have earned.

Challenges faced by cryptocurrency banking

The main problem with holding the cryptos is that this digital currency is completely volatile. Its value may rise when you have already sold it, or may fall the moment you are planning to sell it. 

Hence, both situations are a loss for you. Normally institutions like banks rely on the stable value of currencies as they are the traditional form of currencies, with greater acceptance across the globe.

But the perimeter of digital currency is not so wide due to its instability. Hence, you need to be careful during conversion of cryptos to cash, as its exchange rate is dependent only on the current demand. 

Cashing-out methods

There are mainly two avenues through which you can convert your crypto to cash easily. Namely: 

  1. Third-party broker exchanges

The cryptocurrency exchange is the third-party broker where your cryptos are deposited. Once you request them for withdrawal in the cash form, they will initiate the process, which might take about four to six days to get into your bank account.

Remember that the bank account you have used to buy the cryptos will be the same account where it will be finally transferred, after converting to cash. It is mainly to avoid money laundering activities of individuals.

Although it is simple, easy, and secured, overall it is a lengthy process. 

Aside from this, crypto ATMs and Debit cards are similar to the former one, with one drawback. After creating your account and selling the crypto, you can withdraw physical cash against a high amount of transaction fees to be paid to such third-party brokers.

  1. Peer-to-peer exchange

It is the most popular method to convert your crypto to cash. There are many peer-to-peer platforms where you can advertise your crypto and sell it to the buyer. You can even decide on the payment method you want before selling to the buyer.

The USP of this method is the lesser transaction fees and anonymity of the seller. Moreover, there is a chance of receiving a better exchange rate than the third-party brokerage.

Always check the proof of ID and payment, before releasing your crypto to the buyer on this platform to be safe from fraudsters.

Remember these points

There are always pros and cons to every action you take. Hence, you ought to consider these points before you convert your entire cryptos to cash.

  • Tax

It is implied that all listed reputed crypto exchanges report their transactions to the respective government authority. Hence, any profit that you earn by selling the crypto is taxable. So you should be prepared in advance to pay the requisite taxes.

  • Fees  

There is a small exchange fee involved that you need to pay to transfer your crypto to your bank account. However, the banking fees are pretty much low as compared to that of the brokerage fee. Thus, it is advisable to choose the latter option rather than seeking the broker’s help.

  • Speed 

Relying on third-party broker exchanges can be troublesome for you, as you will have to wait for a couple of days to transfer the money into your bank account.

Thus, there are many shades to this simple conversion of cryptos to cash. You should consider every point to avoid the pitfalls associated with this conversion.

close

Ad Blocker Detected!

We are working hard for these type of contents and we need to pay the writers as well. Please understand this and allow ads on your system.

Refresh