How to Exchange Bitcoin for Cash: Complete Guide

Published: April 15, 2024 | Last Updated: April 15, 2024

Hudson Kisia

Hudson Kisia has been researching and writing content for ElementalCrypto since 2022. He has been writing about crypto, blockchains, and mining for more than 5 years now.

In this guide I will walk you through how to exchange Bitcoin for cash.

While bitcoins are now accepted in many jurisdictions, they are not as widely accepted as fiat currencies. This, plus other reasons, makes it imperative to exchange bitcoin for cash.

Whichever is your reason, in this step-by-step guide, I am going to demonstrate to you how to exchange Bitcoin for cash in just 5 steps. Furthermore, I am going to give you practical examples of how to exchange Bitcoin for cash on major types of platforms.

The 5 steps to exchange your bitcoin for cash

Bitcoin for cash exchange process
Bitcoin for cash exchange process

Irrespective of the type of exchange platform you may choose, in one way or another, you will have to take the following 5 major steps:

1. Choose your Bitcoin exchange platform

It is a good idea to make sure that the platform of your choice supports crypto-to-fiat conversion. More specifically, make sure that it supports fiat currencies that you desire to cash out to. Otherwise, you may have to transfer your crypto assets to a platform or a crypto wallet that does. See 20 Crucial Factors to Look for in a Cryptocurrency Exchange if you are undecided.

2. Set up your exchange

If you’ve not yet opened an exchange account with a Bitcoin exchange platform that supports crypto-to-fiat transfers to local currency within your jurisdiction, do it now. Otherwise, make it ready for a sell transaction. Yes, to convert your bitcoins to cash, you will have to sell them.

The following are some of the preparatory steps you will need to take to make your exchange account ready for bitcoin to cash transfers:

  • Link your account to an external crypto wallet – do this if your existing crypto exchange does not support crypto-to-fiat transfers, or doesn’t support your preferred local currency.
  • Link your bank account – do this if you want to withdraw your bitcoins into cash via bank transfers.
  • Link your payment gateway – this is the case if you want to transfer to a payment gateway such as PayPal or Skrill, instead of a bank account.
  • Verify your link details – depending on your crypto exchange platform, you may be required to provide a two-factor authentication and verify your email address and phone number. In addition, for bank wires that are outside the domain of a domestic bank transfer, you may also need to verify ownership of your bank account.  

3. Load your Bitcoin wallet

To cash out your bitcoins, you will have to transfer to your wallet the amount of bitcoin that you would like to sell. This may be necessary if you are:

  • swapping your other crypto assets into bitcoins – this happens when the crypto you are holding cannot be exchanged for cash directly, hence the need to convert to bitcoin which is widely supported.
  • selling bitcoins via another crypto wallet other than your current wallet – this happens when you want to transfer your bitcoins from an online exchange wallet to a crypto debit card so that you can cash out your bitcoins from traditional ATMs or retail stores that support bitcoin-to-cash withdrawals.

Also see What Is a Crypto Address.

4. Sell your Bitcoin

After loading your exchange wallet with bitcoins, you can now place a sell order from the crypto exchange section.

The selling process may differ slightly depending on your selling method and your crypto exchange platform.

In the next section, we are going to explore different ways of selling bitcoins depending on your chosen platform.

5. Cash out your sale proceeds

Now that your Bitcoin Sell Order is successful, you can proceed to cash out your sale proceeds.  You may send these proceeds to your bank account, debit card, payment gateway, or cash app, depending on what you consider as your best way.  

The main platforms to exchange your bitcoin for cash

While we have explored the 5 main steps for exchanging your bitcoin for cash, each platform has a unique set of steps depending on its architecture.

Let’s explore how to sell bitcoin on each of these types of platforms:

1. Cryptocurrency exchanges

Bitcoin crypto exchange platform
Bitcoin crypto exchange platform

Exchanging your Bitcoin for cash on a cryptocurrency exchange is the most common way.

The process

The following steps will enable you to complete a Sell Order via a cryptocurrency exchange. The sell process and terminology may vary slightly from one crypto exchange platform to another.

The steps are:

  1. Navigate to your crypto exchange page – The crypto exchange page is where the crypto assets are listed for exchange.
  2. Click/Tap the ‘Sell’ button – On a typical crypto exchange page, there will be ‘Buy’ and ‘Sell’ buttons. On most exchanges, these buttons are revealed once you click on a matching pair. Choose the ‘Sell’ button.
  3. Select your Sell Order type – Once you click on the Sell button, a list of Sell Orders will pop up for you to choose the type of Sell Order that you want. The Sell Order types include Instant Sell, Market Order, and Limit Order. Different platforms allow different types of Sell Orders.
  4. Execute the Sell Order – The Sell Order will be executed based on the type of Order that you have placed.

Pros

  • A wide variety of crypto exchange platforms to choose from
  • Competitive fees
  • Advanced features

Cons

  • High-risk exposure

2. Peer-to-peer exchanges

Peer-to-Peer exchange process
Peer-to-Peer exchange process

P2P exchanges are ideal if you are selling your crypto for withdrawal purposes. Maybe you want to withdraw into another cryptocurrency or fiat currency.

Nonetheless, provided that transaction fees are low, you can also sell via the peer platform as part of crypto trading operations. 

The process

A peer-to-peer exchange such as Binance P2P exchange is a decentralized exchange where buyers and sellers interact directly without the platform setting the price.

One party (either the buyer or seller) sets the price of Bitcoin that s/he is willing to exchange it at. Thus, if you are a seller, you will set the price of Bitcoin at which you are willing to sell. If there is a buyer ready and willing to buy at that price, then, the deal is done. Alternatively, you may look out for a buyer who offers a price that you are willing to sell at and make a deal.

Thus, in P2P trading the role of the P2P platforms is to provide an avenue where buyers and sellers meet to trade directly with each other. Due to this lack of price fixing, P2P trade has some of the most competitive rates for crypto exchange. You are also likely going to get your preferred fiat currency on a P2P exchange platform than on ordinary crypto exchanges.

Pros

  • Direct trades between parties without any intermediary
  • It is easier to find your local currency, especially if it is not among the top 10 global fiat currencies such as the USD, GBP, JPY, etc.

Cons

  • Peer trade has a high exposure to scammers
  • Peer transactions are difficult to insure

3. Crypto wallet apps

A crypto wallet app
A crypto wallet app

Some wallet apps, such as Trust Wallet and MetaMask wallet, are advanced in terms of trading and swapping mechanisms. With such crypto wallet apps, you do not need to go to an online Bitcoin exchange platform to sell your crypto.

The process

A crypto mobile app makes it easy to carry out crypto transactions while on the go. The use of a cryptocurrency wallet app is the easiest way to sell your cryptos.

To sell bitcoin using a cryptocurrency wallet app, do the following:

  1. Open your digital wallet – You may have to download and install the digital wallet, if not yet. If already installed, tap on the wallet app to open it.
  2. Tap on the ‘Sell’ button – Once opened, tap on the ‘Sell’ button.
  3. Set the sell options – On the ‘Sell’ dropdown list, choose ‘Sell Bitcoin’ as the first option
  4. On the ‘Deposit to’ dropdown list, choose the wallet in which you want to deposit your sales proceeds.
  5. Execute the sell transaction – Click on ‘Preview sell’ to verify the sell details. Once confirmed, tap on the ‘Sell now’ to execute the transaction.

Pros

  • Simple and user-friendly interface
  • Easily available wherever you are

Cons

  • Requires one to have a Smartphone

4. Offline cold wallets

This is ideal if you are planning to be offline for a while. For example, you are going to places where internet access doesn’t exist or is limited. It can also be because you want to use cryptos in a risky place and you don’t want to compromise your online crypto wallet.

An offline wallet be in the form of:

  • Software digital wallet – such as Exodus wallet.
  • Hardware wallet – such as Ledger wallet.
  • Paper wallet – such as QR Code printout wallet

Some hardware wallets like Ledger Nano wallet have a swapping mechanism that can allow you to sell one type of crypto for another.

Pros

  • Safer and more secure means of keeping crypto holdings than hot wallets
  • Can be used to exchange Bitcoin holdings offline with later confirmations when online.

Cons

  • Most hardware wallets are extremely expensive
  • Risk of losing your wallet – the risk of losing your computer (in case of a software wallet), your hardware wallet, or your paper wallet can be significant. This loss can be physical, or malfunctions.

5. Crypto brokerage firms

online crypto brokerage firms
Online crypto brokerage firms

Robinhood and Webull are some of the leading online brokerage firms. They are considered the best bet by those crypto holders who put privacy first. They are also ideal for those seeking customized solutions not availed by ordinary crypto exchange platforms.

Pros

  • Safeguards your personal information better than the centralized exchange platforms
  • Provides customized solutions
  • Supports more fiat currencies
  • Supports traditional cash deposit methods
  • Customized cash app

Cons

  • Limited number of crypto assets

6. Online email-based payment gateways

Online crypto-to-fiat payment gateways
Online crypto-to-fiat payment gateways

PayPal and Skrill are the most popular options for email-based payment gateways. Both allow Bitcoin crypto-to-fiat transfers.

Thus, if you have a verified PayPal or Skrill account, you can easily exchange your bitcoins for cash.

Pros

  • Ease of use – the exchange process is simple and straightforward
  • Automatic conversion to your local currency

Cons

  • Not available in all countries
  • Maybe slightly more expensive due to poor exchange rate on offer
  • High risk of your account being arbitrarily frozen.

7. Crypto cards

Bitcoin crypto debit card
Bitcoin crypto debit card

Crypto cards have become the most popular way of exchanging Bitcoin for cash for shopping purposes.

The following are the major crypto cards:

  • Crypto debit cards – e.g., Bitcoin debit cards, BitPay card, etc.
  • Crypto credit card
  • Crypto gift cards

The process

In this case, you simply load your crypto card with the withdrawn amount of crypto. You can then use the crypto card just as you would use regular debit cards such as the Visa card. The only rider is that crypto cards can only be used for shopping in those places that accept cryptos as a payment method.

Pros

  • Fast and secure way of exchanging Bitcoin for cash at the point of sale
  • Highly portable and easily accessible means of exchanging Bitcoin for cash

Cons

  • Charges higher fees for usage
  • Can only be used at those points of sale that accept Bitcoin as a form of payment

8. Cryptocurrency ATMs

Bitcoin ATM
Bitcoin ATM

A Crypto ATM is similar to traditional bank ATMs except that they deal with cryptocurrencies. The most common Crypto ATM is the Hermes Bitcoin ATM.

Types of Crypto ATMs

Bitcoin ATM types
Bitcoin ATM types

There are two types of Crypto ATMS:

  • Unidirectional Crypto ATMs – support either buying or selling crypto digital assets
  • Bi-directional Crypto ATMs – support both the buying and selling of crypto digital assets

Of these two, unidirectional crypto ATMs are the most common.

How Crypto ATMS work

Crypto ATMs connect directly to the online platform.

You can use either a crypto debit card or crypto wallet QR Code to feed the required data for blockchain transaction processing.

The process

The following is a typical Bitcoin-to-cash exchange process on Bitcoin ATMs:

  1. Have the amount you wish to withdraw in your digital wallet – you can either specify the amount of bitcoin that you want to exchange for fiat currency or you can specify the amount of fiat currency that you want to receive so that the ATM can convert based on the prevailing exchange rate.
  2. Find a Crypto ATM near you
  3. Access the ATM by pressing the appropriate button (e.g., ‘Enter’ or ‘Start’ button)
  4. Choose the ‘Sell’ option (in case of bi-directional crypto ATMs)
  5. Verify your identity, if prompted – this may include a phone number, Social Security Number, and/or photo ID, as may be required
  6. Enter the amount of bitcoin that you want to sell
  7. Scan the QR code generated by the ATM for the Bitcoin wallet address
  8. Send the exact amount of bitcoin to the generated wallet address
  9. Wait for a few seconds for the Bitcoin blockchain network to verify the crypto transactions thus carried out. However, some crypto dispensers can release the cash without having to wait for blockchain confirmation
  10. Receive cash dispensed from the ATM

Pros

  • Fast and convenient means of exchanging Bitcoins for cash

Cons

  • ATM-based crypto dispensers are only available in very few countries
  • Bitcoin ATMs are mainly available in major urban cities and only at a few strategic locations
  • Unlike many online crypto exchange platforms, Bitcoin ATMs are not insured

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Hudson Kisia has been researching and writing content for ElementalCrypto since 2022. He has been writing about crypto, blockchains, and mining for more than 5 years now.

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