Cryptocurrency is a hot commodity right now. The value of Bitcoin, the most popular cryptocurrency, has skyrocketed over the last few years. Many people have made huge sums of money by investing early in cryptocurrencies.
However, some people are eager to know how to exchange crypto for cash. If you have owned cryptocurrency for any length of time, you have probably thought about selling some of it.
Unfortunately, selling bitcoin or any other cryptocurrency isn’t as simple as just cashing out your coins at the ATM. You will first have to convert your cryptocurrency into a format that is recognized by banks and financial institutions.
In this guide, we will show you how to exchange crypto for cash, but before then, we will be giving you insight into more details about cryptocurrency.
What Is Cryptocurrency?
Cryptocurrency is a particular type of currency that only exists digitally, that usually has no central issuing or regulating authority but instead uses a decentralized system to record transactions and manage the issuance of new units, and that relies on cryptography to prevent counterfeiting and fraudulent transactions.
Simply put, cryptocurrency is a form of digital currency that uses cryptography to secure and verify transactions. They are often decentralized, which means they are not issued or regulated by a central authority such as the Federal Reserve.
How To Exchange Crypto For Cash
For those who wish to minimize volatility or convert crypto to fiat, there are several ways to exchange cryptocurrency for cash. Some options involve complex trading strategies that require experience and expertise, while others offer a more straightforward approach.
Unfortunately, the process for converting crypto to fiat isn’t as straightforward as it should be. The solution you choose will depend on how much you’re selling, what local regulations apply to you, and how quickly you want the cash in your pocket.
The good news is that there are a few ways to convert your cryptocurrency into cash. Some require you to move your crypto to a third-party service — which means you’ll be giving up some control over your funds in exchange for the convenience of converting them directly into cash.
Different ways to exchange crypto for cash are by;
1. Using Cryptocurrency Exchange Platform
Cryptocurrency can be exchanged for other currencies such as the US dollar, euro, yen, and more using an exchange platform. Cryptocurrency exchanges provide various levels of security and privacy.
The first step in exchanging your crypto for cash is to choose an exchange. An exchange allows you to trade one cryptocurrency for another — or, in some cases, for fiat currency (i.e., dollars, euros).
Cryptocurrency exchanges are online platforms where you can exchange one cryptocurrency for another cryptocurrency (or for fiat currency). In some cases, exchanges may require you to have a cryptocurrency wallet — an online app that lets you store, send and receive digital currency — before you can buy or sell any cryptocurrency.
The process of exchanging cryptocurrency varies depending on the cryptocurrency exchange you use, but the basic steps are similar across all exchanges. Once you’ve found an exchange, create an account and verify it according to the steps outlined by the exchange.
You’ll then be able to log in and set up your wallet or add funds to your existing wallet. You can add funds by transferring money from your bank account or by using a credit/debit card. Or, if you already own another type of cryptocurrency, you can transfer that into your wallet.
To complete the transaction, follow the instructions provided by the exchange. This will include selecting which type of crypto you’d like to sell and how much of it you want to sell off. Then confirm the transaction.
There are many exchanges available online today. Exchanges vary in the type of cryptocurrencies they support and how many cryptocurrencies you can trade on them. Some exchanges only allow trading between cryptocurrencies while others allow buying cryptocurrencies using fiat currency such as a credit card or bank account.
Some exchanges, such as Coinbase, allow users to sell their crypto for fiat through the exchange itself. For example, if you wanted to exchange bitcoin for U.S. dollars, you would sell your bitcoin in the exchange for USD at the prevailing rate and withdraw it into your bank account.
Pros And Cons Of Using An Exchange
- Pros
- The benefit of selling on an exchange is that if it’s one of the bigger exchanges, such as Binance or Bittrex, there will be lots of buyers looking to purchase your crypto. Thus, you’ll likely be able to sell quickly.
- Cons
- The downside is that you will likely need to sign up for an account and go through verification before selling any crypto. Most exchanges require personal details such as name and address, as well as proof of ID and residency before you can make any trades there.
How To Use A Cryptocurrency Exchange Platform
Exchanging cryptocurrency for cash on an exchange platform is fairly straightforward.
Here’s how it works:
- You deposit your crypto into an exchange. This step typically requires you to provide some identification as well as a wallet address for the currency you want to deposit.
- You sell your crypto for cash. The exchange should offer you a quote telling you how much cash you’ll receive for your cryptocurrency in return for completing the transaction.
- You withdraw the cash from the exchange to your bank account or debit card or spend it using a linked card.
2. Using An ATM
You can also exchange crypto for cash using a Bitcoin ATM.
ATMs are another option. They’re similar to traditional bank ATMs, but they allow users to buy and sell crypto as well as deposit, withdraw and transfer funds between their crypto and bank accounts.
Where To Exchange Cryptocurrency For Cash
Exchanging cryptocurrency for cash is easier than you think, the first thing to do is find an exchange that will allow you to sell the digital currency you hold and get cash in return.
Coinbase, one of the largest cryptocurrency exchanges, has been offering this feature since 2012. You can use it to quickly turn any digital currency into cash that can be deposited into your bank account or used to purchase from a merchant who accepts cryptocurrencies as payment.
Here’s how to exchange crypto for cash on Coinbase:
- Log in to your Coinbase account.
- Click on the “Accounts” tab at the top of the screen.
- Select “Sell” from the menu next to your cryptocurrency balance that you want to turn into cash (i.e., Bitcoin, Ethereum, etc.).
- Choose the amount of your balance that you want to convert into U.S. dollars or another fiat currency (i.e., government-issued currency).
- Select either your PayPal account or a U.S.-based bank account where you want the money sent and click “Continue.”
- Review the details of your transaction and click “Confirm Sell.”
Those who want to convert their coins to Nigeria Naira can also use Linzsolutions Over The Counter Exchange (OTC) for fast safe transactions.
Closing Thought
Exchanging cryptocurrency for cash is a common need, particularly when the crypto markets are volatile. Crypto holders may want to lock in gains after a price spike or cut losses after a price drop.
The aforementioned options are generally the easiest way to convert crypto into cash.
While there are many ways to exchange cryptocurrency for fiat currency (cash), the most popular is through a broker or exchange platforms.
These services usually allow you to sell your crypto for a variety of different fiat currencies.
