If you’ve ever invested in cryptocurrency, chances are you want to know how to convert crypto to cash. After all, while cryptocurrency is becoming increasingly popular, you still can’t exchange it for most goods or services, meaning that cash is still necessary.
That being said, many believe that crypto is better than cash, especially popular cryptocurrencies like Bitcoin, which do have popular uses from being used for remittance payments to being accepted by companies like Tesla. Even other cryptocurrencies tend to be superior to cash in the sense that they are safer and produce faster, more seamless transactions that can’t be traced by a bank. As such, if you’re worried about security, crypto is definitely better than cash.
But everyone does need to know how to convert crypto to cash — so, read on to find out how.
How to Convert Your Crypto to Cash
In learning how to convert crypto to cash, the first step is to figure out which method by which you want to cash out on your crypto. And the best way to determine this is to ask yourself a few key questions: do you want to know the fastest way to convert crypto to cash? Or the cheapest way to convert crypto to cash? Moreover, where do you want your cash to be deposited and within what time frame? Answers to these questions will help you determine how to convert crypto to cash in a way that makes the most sense for you and your needs.
First and foremost, determine what type of crypto exchange or third-party broker you are using. Not all crypto exchanges will allow you to convert your crypto into cash but some, like Juno or Coinbase, will. Juno’s platform is unique, as it allows you to cash out in just seconds but most exchanges will typically take 1-5 days.
With Juno, you can expect to see your money in your high-yield checking account within thirty seconds, which is especially useful when you need money instantly. You can then withdraw this money from multiple ATM locations around the world, or transfer the money from Juno to another bank account or PayPal account, instead.
This process is unique to Juno, though, which allows you to buy and sell cryptocurrency within seconds using cash in your checking account. Another important feature to note here is that Juno doesn’t charge anything for these transactions. While other platforms can charge up to 4% or even a flat rate fee of $25, say, Juno charges 0%.
The process is similar enough for other exchanges as well: connect the bank account or PayPal account that you want your cash to be deposited into, and select how much crypto you want converted. You will need to select both the type of cryptocurrency you want to be converted, Bitcoin versus Litecoin, and the type of fiat currency you want to receive it in, so dollars versus pounds.
Then, follow the steps outlined on your exchange platform to approve the transaction and wait for 1-5 days before seeing your money in your account. Note that there is often a transaction fee involved here, which changes depending on your platform and country of origin (COI).
Another way you can learn how to convert crypto to cash is via peer-to-peer lending platforms like LocalBitcoins (if you are selling bitcoin). With a peer-to-peer platform, you sell your crypto to another person in exchange for cash. You can ask the buyer to make a cash deposit to your bank account, a bank transfer, or meet in person for the exchange.
Note that you should always check for proof of ID and payment prior to releasing your crypto to this person. While peer-to-peer lending has worked successfully for many, it is best for those who know what they’re doing and how to navigate these platforms in such a way that they can verify the identity of their buyer. There is a lot of fraud with this method but platforms like LocalBitcoins keep your Bitcoin locked up until you have confirmed receipt of the cash, which makes it a much safer method to use than other platforms.
Here’s how P2P lending works: when you want to sell crypto, decide how much of that crypto. Say you want to sell 1 Bitcoin on LocalBitcoins for USD. You can post that you are selling 1 Bitcoin and American buyers will view this. If they agree with your price, they will send a request that you then accept.
Once you accept, you place your Bitcoin in an escrow account through LocalBitcoins which holds the Bitcoin until the money has been transferred to your account by the buyer. When the money is received, the Bitcoin is released.
Yet another way how to convert crypto to cash is by opening a crypto exchange platform like Coinbase if you don’t already have one. This is especially useful if you don’t want to go down the P2P lending route and your current exchange or wallet does not allow you to convert your crypto to cash. A platform like Coinbase is also useful because it allows you to convert many types of cryptocurrencies into cash versus just one or two.
Now, to do this you will need to send your cryptocurrency to your unique Coinbase address after making an account and click, “Receive.” Then, navigating to the Buy/Sell page, you can sell your cryptocurrency, send it to the bank account you have linked, and withdraw the money as fiat currency after your transaction goes through.
When to Convert Your Crypto to Cash?
Ultimately, when to convert crypto to cash depends on you and your unique situation. If you need cash and don’t want to resort to using cash from assets like your 401(k), it makes sense to sell your cryptocurrency, instead. Additionally, if you are anxious or stressed holding cryptocurrency for whatever reason, whether it be the volatility or another reason, it makes sense to convert your crypto to cash for those health reasons.
If you are wanting to convert your crypto to cash but are waiting for the right moment then the price of your transaction and the price of your cryptocurrency both matter. Given that the crypto market is volatile, it can be tough to time and often a cryptocurrency may dip quickly after a high so it’s tough to know the “right time” to sell. If you have met your investment goals, however, it can be a good time to sell.
On the other hand, you should wait to convert if you believe that your crypto will rise in value. If you’re still excited about owning cryptocurrency, or if you own Bitcoin which has a limited number of coins available, then it might be more worthwhile to wait to convert that crypto to cash. Ultimately, however, only you can make the decision.
Converting crypto to cash isn’t difficult, but it does require some planning given that transactions aren’t instantaneous and can be pricey with transaction fees. Ultimately, however, if you want to convert your crypto to cash it can absolutely be done!
