So after trading some crypto and making profits, you want to convert some of them to cash, and you don’t know how to do so?
Or someone gifted you some Bitcoin or another cryptocurrency, and you want to learn how you can convert it?
Well, several other people are looking for different ways that are easier to convert a cryptocurrency to fiat.
Here, you will learn the different methods you can utilize while converting your crypto to your local currency and the pros and cons of each method.
How Can You Convert Your Crypto to Cash?
Especially for beginners, there might be confusion on how to convert the crypto you own to your local currency without issues.
There are several ways you can utilize to change your crypto to any currency of your choice; each of these methods has its pros and cons.
The major ways we will discuss below include debit cards, selling them on exchanges, using the P2P method, and using a Bitcoin ATM.
A crypto converter can also come in handy when you need to sell off your cryptocurrencies. With a crypto converter, you can compare the value of the crypto you want to change with that of your local currency.
Peer to Peer method
The use of peer-to-peer has increased over the years due to its ease and increasing regulations among countries.
The peer-to-peer method of changing crypto to cash is very simple, and it involves two individuals; the buyer and the seller.
Most peer-to-peer transactions happen within an exchange or a platform where you sell your cryptocurrencies for cash. Since peer-to-peer can happen anywhere, you can even use social media platforms to sell your cryptocurrencies to those who need them.
Benefits of the Peer-to-peer Method
- You sell your cryptocurrencies on your terms, meaning those buying do so within the price you set.
- Apart from exchanges, P2P transactions can happen on social media platforms such as WhatsApp.
- You attract lower transaction fees than converting your cryptocurrencies to a crypto exchange.
Challenges of the Peer-to-peer Method
- It takes longer to agree on a certain price and sell your cryptocurrencies.
- There’s a risk of being scammed by a buyer.
Convert Your Cryptocurrency to Cash Using Crypto Exchanges
A crypto exchange has all you need to change your cryptocurrencies to cash, although they are increased fees associated with this method.
Most crypto exchanges have the buy and sell button, and the first step you need is to select the sell option.
The cryptocurrency you selected will be converted to cash which you can now withdraw to your bank account. This method of changing crypto to cash mostly works in centralized exchanges, where you must have a custodial wallet.
Benefits of Converting Your Crypto to Cash with an Exchange
- It is often faster to sell your cryptocurrencies for cash with a centralized exchange than P2P.
- They are a long list of exchanges that you can choose from to exchange your crypto assets for cash.
- The steps needed to sell a cryptocurrency in exchange are relatively easy and secure.
Challenges of Using an Exchange to Convert Crypto to Cash
- The major challenge one would face when converting crypto to local currency in an exchange is the higher rate of transaction fees.
Convert Your Crypto to Cash Using Crypto Debit Cards
The new crypto debit cards are an innovation in the crypto space. With these cards, you can easily make payments online or withdraw money from your crypto balance.
A good example of the crypto debit card is that of Binance; with their debit card, you don’t need to convert your crypto before spending. This means that whenever you need to make a payment or withdraw, there’s no extra conversion needed.
Benefits of Using Crypto Debit Cards
- Using a crypto debit card is quite simple and safe, so long as you don’t reveal your personal details.
- Some stores and ATMs support crypto debit cards.
Challenges of Using Crypto Debit Cards
- Some countries still need access to this innovation in the crypto industry.
- The normal fees for ATMs still apply, which may be strange for a crypto user.
Convert Your Crypto to Cash Using Crypto ATM
This mostly applies to Bitcoin as it is the major cryptocurrency that has verified cash ATMs in some cities.
Benefits of Using a Crypto ATM
- You don’t need a bank account for this ATM, as the whole transaction depends on your crypto wallet.
- Crypto ATMs are not concentrated in one city, so you may be lucky to find them around you.
Challenges of Using Crypto ATMs
- The major challenge crypto ATMs have is that it is not available in some cities and may not be accessed by those in rural areas.
- Unlike other methods mentioned above, crypto ATMs have a reputation for charging high transaction fees.
- Sometimes the ATM may need more cash in the machine, and you will have to wait until it does so.
Crypto investors usually have a major challenge: converting their crypto assets to their local currency.
With proper knowledge, there are numerous ways you can change your cryptocurrencies to cash. You can do that using a centralized exchange, peer-to-peer method, crypto debit card, and crypto ATMs.
With any method, you choose, ensure that you don’t reveal personal details such as your wallet, private keys, or bank details.