With the crash of the crypto market in 2022 and the unstable market, many crypto investors are looking to cash out tier cryptocurrency in a bid to prevent more losses. If you’re looking for ways to convert your cryptocurrency to real currency, there are several available methods of doing so. However, it is important to note that tax charges may apply depending on the currency being converted to.
Here are some ways to convert your crypto to cash:
Sell your crypto through exchange platforms
Crypto exchange platforms are great ways to convert your coins to cash. Exchange platforms like Coinbase have features that allow users to buy and sell their coins directly. However, there are numerous exchange platforms and it is best to use the exchange platform that currently holds the coins you want to trade.
If the coins are not in your custody, exchange platforms like Binance can be used to sell your coins in exchange for any currency of your choice. You can access your money via your cash balance in whatever crypto exchange you use. You can also access these platforms via your crypto portfolio tracker like CoinStats.
Peer-to-peer trading platforms
Although direct trade options can be used to convert crypto to cash by selling crypto to another person via another channel, peer-to-peer trading platforms offer better trading opportunities because investors are open to more offers and can choose the best cash offer for their cryptocurrency.
The process is straightforward and easy, especially with good peer-to-peer platforms like Binance. The cryptocurrency for sale will be held until the cash has been deposited in the seller’s account before the crypto is released to the buyer.
Indirect exchange
Some cryptocurrencies cannot be directly converted to cash or real money. In other to cash out on such currencies, investors have to first convert them to other currencies via exchange and the new currency can be sold for cash.
With the use of a crypto debit card
Crypto debit cards are similar to regular debit cards in the way that they function; the major difference is that crypto debit cards pull funds directly from your crypto wallet as opposed to regular debit cards that pull from your bank account.
A popular example is the Bitpay card that can be used to convert several cryptocurrencies like bitcoin, ethereum, and other popular coins to US Dollars and other supported currencies.
Use a bitcoin ATM
Bitcoin ATM machines are nothing like regular ATM machines. They function to convert bitcoin to cash and vice versa through sales and exchange of coins and currencies. To convert crypto to cash on a bitcoin ATM, the machine will generate an invoice for the sale of your currencies at already agreed rates. On the other hand, cash can be inserted into these machines for the purchase of cryptocurrencies.
Bitcoin ATM machines are readily available in several countries around the world and create easy access for users to exchange and convert their crypto to cash.
Sell your crypto through a broker
If you have a crypto broker that holds your coins, then the best and easiest way to convert your coins to cash is to trade with the broker. All you have to do is to initiate the trade with your broker and once the trade is complete, your cash will be deposited into your account.
Things to look out for when converting crypto to cash
There are certain things that you should consider when converting your cryptocurrency to cash and some of them include:
Charges on transactions
Crypto transactions usually attract certain charges depending on the type of transaction. Converting your crypto to cash will also attract charges that differ depending on the size of the transaction; how much crypto you want to sell or convert to cash.
Goals
Your crypto investment goals should be well-defined before converting your cryptocurrency to cash. If you’re in for long-term crypto investments, then regular cash withdrawals are not advisable. However, if you’re only interested in cashing out on your profits, you can consider any of the means above to convert your crypto to cash.
Taxes
Conversion of cryptocurrencies to real money will attract taxes based on the region and currency being converted to. This applies to all conversions irrespective of the method applied like using a crypto ATM machine, debit card, or even through a broker. It is best to get advice from a tax professional before proceeding to convert your crypto to cash.
Speed
All different methods of converting crypto to cash have different speeds and require a different amount of effort to complete a transaction. For example, it is easier and faster to convert your crypto to cash by trading on centralized exchange platforms, via a crypto portfolio tracker, or using a crypto debit card than it is to use peer-to-peer platforms or find a crypto ATM machine.
The time frame and urgency of the transaction are important factors to consider when choosing a conversion method.