When you desperately need to swap crypto for fiat, it’s imperative to be able to cash out quick. Here’s how to swap cryptocurrency for fiat currency in record time.
Although the list of vendors who accept cryptocurrency is continually growing, fiat remains the easiest way to pay for goods and services. Often there’s no alternative but to convert your digital assets into paper money to make a rental payment or cover a medical bill, for example.
There are a number of crypto-fiat cash out options, just as there are countless fiat-crypto onramps. In this guide, you’ll learn:
• How to cash out cryptocurrency
• How to avoid invasive KYC
• Which crypto-fiat banking services are rated
• How to organize a crypto-for-cash sale in person
• How to cash out crypto to PayPal
• How long it will take for funds to clear
• How to collateralize your crypto to obtain a cash loan
From brokers to challenger banks and dominant exchanges, businesses are desperate to facilitate your crypto-for-cash deal. But even if you’re just as desperate to lay your hands on a bundle of banknotes, be sure to learn the pros and cons of each approach before making a decision.
Option 1: Cash Out Crypto Peer-to-Peer
Using a peer-to-peer marketplace is one of the best options for privately cashing out, although you should be prepared to take a hit on the market price. Peer-to-peer platforms include LocalCryptos (formerly LocalEthereum), LocalBitcoins, Bisq, HodlHodl, BitQuick and LocalCoinSwap.
LocalCryptos is one of the most popular options, since it lets you skip the KYC process and maintain your privacy. Remember, selling crypto for cash is no-one’s business but your own. The most liquid peer-to-peer platform, LocalCryptos utilizes a noncustodial escrow service, meaning the crypto you’re selling sits in escrow until you confirm that the buyer’s payment has appeared in you account. Then, you release the escrow and mark the transaction complete. Like eBay or Amazon, LocalCryptos runs on a feedback system.
To arrange a cash-for-crypto deal, visit LocalCryptos and click “View the marketplace.” From the next page, you can complete the fields that specify whether you are buying or selling, the crypto in question, your location, and your preferred payment method. As far as payment methods are concerned, options include bank transfer, cash in person, PayPal, MoneyGram, international transfer and Skrill. Once you’ve completed the fields, hit ‘Search,’ scroll through the results (buyers offer different rates) and open a dialogue. LocalCryptos charges a 0.25% fee to the person who places the offer listing and 0.75% to the person responding to the offer. For more detailed guidance, click here.
Option 2: Cash Out via Prepaid Fiat-Crypto Card
Cashing out is simple via platforms like Wirex and Revolut. You can set up an account with either and then purchase cryptocurrency in-app, from which you can also send and receive funds. One key difference is that Revolut doesn’t let you deposit crypto from an external source – it has to be bought in-app or received from another Revolut account. With Wirex, anyone can send cryptocurrency to your Wirex address.
When you need to turn virtual currency into cash using Wirex, Revolut, Coinbase Card or a similar multi-currency portal, just exchange in-app to convert part (or all) of your balance into the fiat of your choice. At this point, you can use the corresponding debit card to withdraw money at an ATM, make contactless or online payments, or send fiat to a traditional bank account. The drawbacks are obvious: transaction fees, usage limits and the burden of KYC. What’s more, such centralized portals don’t allow you to retain ownership of your private keys, so you certainly don’t want to keep too much crypto in them since your funds could theoretically be frozen. Still, they’re a good option for when you need to exchange your bitcoin or ETH into fiat at the touch of a button.
Option 3: Cash Out with an Exchange
A common way to cash out your crypto is to use an exchange such as Coinbase. All you need to do is hit the Trade button, select Sell and choose the cryptocurrency you’d like to convert to fiat. The transfer will be paid into your wallet, at which point you can withdraw to your linked bank account or, if you prefer, your PayPal. However, you’ll have to contend with a short holding period after initiating a withdrawal. Withdrawals to bank accounts can take anywhere between one and six working days.
The above process is broadly similar for other crypto exchanges, and fees generally depend on factors such as your location and transaction value. Further information on Coinbase withdrawal fees can be found here.
Option 4: Sell Crypto for Cash in Person
You can personally organize your own cash-for-crypto sale, the same way you can arrange to sell an old drum kit or weights set. This can be arranged online using a P2P portal like LocalCryptos, a crypto message board, Twitter, Facebook, or even the local newspaper. You could sell to a friend or family member interested in crypto, or to someone you meet at a cryptocurrency gathering or conference.
The great thing about this option is that there are no fees or limits and the buyer doesn’t have to go through the hassle of KYC. You can negotiate the terms yourself and come to an agreement both parties are happy with; as a seller, you might even convince the buyer to buy at market price. Of course, conducting such a deal may entail its own security concerns, particularly if the buyer is a stranger. If you go through with such a deal, make sure it’s in a public place. (In the immortal words of Sonny Corleone, “I don’t want my brother coming out of that toilet with just his dick in his hands, alright?”)
Option 5: Cash Out at a Bitcoin ATM
As mentioned, you can use a Wirex card the same way you would use an American Express, lifting cash from an ATM or swiping it at the counter. But dedicated Bitcoin ATMs are different: they work with various software and hardware wallets, converting your crypto to fiat in real time. Use this bitcoin ATM map to find your nearest machine. At the time of writing, there are just under 7,500 crypto ATMs in 73 different countries. Easy to use, fast and offering reasonable exchange rates, these are a decent option if you have one within easy reach: sadly, many people don’t. Withdrawal rates can also be as high as 8% per transaction, so you wouldn’t want to make it a regular habit.
Option 6: Collateralize Your Crypto
What if you need hard cash but don’t want to lose your cryptocurrency? With this option, you can have your cake and eat it. Crypto lenders such as Cred, Celsius and BlockFi let you collateralize your crypto assets, which they then use to lend to institutional investors. Going this route will provide you with a passive income (1-8%) while enabling you to retain ownership of your crypto and, in most cases, to terminate the arrangement at any time. Alternatively, you could borrow against your own crypto by taking out a crypto-backed cash loan in the fiat currency of your choice. Your line of credit will be proportionate to the size of your crypto stake, and interest rates vary between platforms. Nexo’s, for instance, starts at 5.9% APR.
As demonstrated, there are many options for those seeking to convert crypto into cash. Whether you’re holding onto bitcoin or some altcoin, chances are you’ll find a cash buyer. Just remember the following:
• Cashing out P2P lets you avoid KYC and custodial platforms
• Withdrawal fees vary greatly across platforms
• Crypto-fiat banking services let you cash out in-app
• Verify clearance times if withdrawing to a bank account
• Conduct in-person deals in a public place
• You can obtain cash without selling your crypto via lending platforms
Whatever withdrawal method you choose, turning your crypto into cash should be an informed decision. If you badly need cash, choose the option that is most advantageous, whether your priority is speed, a generous exchange rate, privacy or convenience.
Disclaimer: This article is for informational purposes only. Invest at your own risk. Neither Bidl nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to have been caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Tl;dr: if you get rekt, it’s on you.