If you’re not a crypto trader (like myself), but have been gifted or hold some Bitcoin and would like to exchange it for fiat, I provide you the easiest options to do so.
The most trusted way of converting your bitcoin to fiat is via a trusted exchange like Coinbase/Kraken. The least trusted way is to find someone on Craigslist, face to face, who would be willing to give you a good price on your bitcoin. Doing so adds a lot of risk to the transaction, and therefore is not advised. There are several ways but here we will mention a few, where you can have your cryptocurrency to hard dollar bills:
- Popular Exchanges – Coinbase, which is most common to consumers who are new to bitcoin (higher fees, easy accessibility, centralized institutions ) while Kraken has lower fees, easy accessibility and is decentralized. Both of these are very reliable and trusted online exchange platforms that can convert your bitcoin to cash via a digital wallet.
- P2P Exchanges – An exchange outsource platform like Local Bitcoins, where you can look for other consumers who want to purchase bitcoin from you either online, or via a teller machine/“BTM.”
- Two-way Bitcoin Machines – Physical teller machines that allow you to easily exchange your Bitcoin for fiat cash. Although these will typically have higher fees, and you’ll have to go there physically, they are tangible and easy to use. Here is a video of a guy withdrawing cash from a two-way ( bitcoin machine (BitExpress).
Selling Bitcoin on an Exchange
If you go through an exchange, you have to go through a series of steps to transfer it form the exchange to your bank account, wait for it to be transferred and then withdraw from the ATM.
Firstly, Coinbase is the most common online tool and reliable platform to convert your bitcoin and transfer it to your bank account, then withdraw it from the bank for cash. You can move your bitcoin and have it transferred to your bank account within 4-5 days. If you have to convert into $5,000 or more, you can do a wire transfer which can take 1 to 3 business days. Their fees are above 1% and it is monitored by them. They can see your transactions being processed, which is the opposite of what bitcoin is supposed to be – pseudonymous.
Kraken has low transaction fees, excellent customer service and their vision is to make sure that cryptocurrency becomes mainstream. They are a reliable platform where you can easily exchange fiat for crypto and vice versa. The minimum withdrawal is $20 and can increase to more than $50,000 ( Source: Kraken). The processing time for this in the US for domestic wire transfer takes about 1-3 business days. If you’d like to transact higher amounts often, you will have to adhere to their compliance requirements. If you want to withdraw to more than $50,000 you have to fulfill their KYC requirements.
Bitcoin/Crypto ATM Machines
If your city has two-way BTMs, this may be your fastest option to exchanging BTC or other crypto for cash. Although transaction fees vary and are typically higher than online exchange fees, you will receive your cash immediately, just as you would at a normal bank ATM. Keep in mind, you will have to adhere to the operators KYC procedures for exchanging BTC for cash. The BlockchainBTM machines, which are located only in the US, currently do not support bitcoin to cash transactions. However, we may be rolling out the program as we continue to grow.
Cryptoatmradar.com mentions that 40% of the 4,376 bitcoin machines all over the world buy bitcoin. Please go directly to the link of cryptoatmradar.com if you wish to find the nearest bitcoin machine to withdraw your cash. Here are the steps as mentioned by Cryptoatmradar on their site:
When you sell bitcoins for cash using Bitcoin ATM, there are several general steps you need to go:
- Verification step (optional, but normally for sell operations the operator will require you to identify yourself, however the identification procedure may vary for different machine types, or even operators running similar machines)
- Send bitcoins to the given by bitcoin ATM QR code
- Depending on the settings you will either get cash out of the machine immediately (may be set for small amounts), or you will be given the redeem code and need to wait for bitcoin transaction confirmations (normally 1 confirmation is used, but depends on the machine and operator, e.g. wallet update of Robocoin ATMs required customers to wait for 6 confirmations before they can get cash)
Lastly, If you do not want to do an exchange or cannot find a bitcoin machine near you that buys bitcoin, you can go to a site named localbitcoins.com, which is popular among traders, where you can look for other people who want to buy bitcoin. If you want to sell your bitcoin, after you register in their domain, you get a secure online bitcoin wallet and you can search other traders. This is where you get a list starting from the most trusted and reliable trader. Each trader has specific requirement on a payment method. You can choose which is more accessible to you. The traders’ listed adhere to the site’s KYC/ AML.
Bitcoin from the beginning can mean that you have to exchange your bitcoin to cash if you know someone who wants to buy bitcoin and you can contact them directly. He gives you the cash on hand and you send him the bitcoin to his public key. In the early years of BTC, you can see these types of trading posts on Craigslist. Those were the shady bygone days. Today, this is not advised for various reasons. The best thing about localbitcoins.com, they will act as an escrow before they can authorize the transaction–making sure that you get your cash on hand and the trader gets an authentic bitcoin