There are at least six ways to exchange bitcoin for traditional money. Here you will learn how to do it cheaper, whether you have to pay taxes and in which case the bank can block your card.
There are many options for withdrawing cryptocurrency and exchanging it for fiat money. This can be done using exchangers, directly from exchanges, for cash in person, and other ways. Here is described in details about each of them, about the possible risks and commissions, and explain whether you need to pay taxes and how to do it.
Exchangers
Exchangers are the most popular way to withdraw digital coins. These are special services that allow you to sell cryptocurrency for fiat money, and then send it to a bank card, payment systems like PayPal and others.
Cryptocurrency cashing can be done as follows:
- the user chooses the exchanger;
- indicates which cryptocurrency and how much he wants to withdraw;
- in response, the exchanger determines the amount received, for example, in rubles, and also indicates the address to which the coins should be sent;
- the user transfers coins to the specified address. In some cases, after that, on the exchanger’s website, you must click the “paid” button. If you do not, the money will not be transferred;
- when the cryptocurrency arrives at the address of the exchanger, its employees will process the transaction and transfer funds to the user’s account.
You can avoid using exchangers. Many exchanges now can withdraw funds to a bank card. On the one hand, it is more convenient and safer, because it reduces the risk of an unscrupulous counterparty.
On the other hand, commissions for withdrawing cryptocurrency directly from the exchange can be significantly higher than those set by exchangers. Reason: Marketplaces rarely deal with fiat currencies on their own. Instead, they partner with other services.
In other words, when cashing out a cryptocurrency, the trading platform transfers funds to a third-party service, and that service already transfers money to the user.
Other methods
Cryptocurrency can be cashed out with the use of crypto maps, which is an analog of ATMs. There is own digital address in each of them. The user can cash out bitcoin himself.
Another equally risky way to exchange digital money for traditional money is a cash transaction. For example, agree with a familiar person in person and make a deal at a meeting. Such operations should only be carried out with people you trust because there are many ways to cheat. A partner can pay at the wrong rate, disappear when receiving a cryptocurrency, appropriate it for himself, citing a technical error, or simply rob it.
There are at least six ways to withdraw cryptocurrency. The most popular way is through exchangers. Aggregators will help you choose a service with the most favorable rate and provide an opportunity to work with a huge number of payment systems. But there is a risk of using the services of scammers and losing money.
The most convenient way to withdraw funds is through exchanges. However, not all marketplaces have this option. Also, an additional commission may be charged for withdrawing cryptocurrency if the transaction takes place through third-party services.