Gareth Johnson
Gareth Johnson
Updated on December 8, 2021

When Bitcoin prices soar, so does the hearts and wallets of HODLers who zealously hoard the digital gold with draconic determination and patience. Holding onto your Bitcoin as the digital currency rides the price roller coaster through dips and peaks may require nerves of steel, but the payoff can be immensely profitable if you know where to get off. Buying Bitcoin when prices are low and cashing out once they reach a peak can yield great sums of money for an attentive Bitcoin holder.

Bitcoin, the most popular cryptocurrency in the world, has grown immensely during the last decade and is on its way to becoming an alternative payment method accepted by major companies and retailers. However, at its core, it’s an asset that can be exchanged for fiat currency (like USD, EUR, GBP, AUD) when you need that sweet sweet cash in your wallet.

We prepared this guide to introduce you to several methods you can use to cash out Bitcoin for fiat currency. Whether you like to trade cryptocurrencies frequently or have just begun investing in Bitcoin as an alternative to your savings account, you will benefit from learning about how you can cash out your digital assets.

How to Sell Bitcoin and Other Cryptocurrencies for USD

Bitcoin and other cryptocurrencies are digital assets that are native to the crypto economy. You can think of them like stocks or bonds to understand how their values can be converted to fiat currency (like US dollars or Euros), but they are also different from these traditional assets because they are part of a different financial ecosystem. 

Physical bitcoin beside folded USD bill

The most obvious difference is that while you can’t buy a computer or tip an artist with stocks or gold, you can now do both of those things and more with Bitcoin. There are even services like “Living Room of Satoshi” that let you pay your bills with Bitcoin! Nonetheless, you might want to exchange Bitcoin for fiat money for many reasons and that means you will be converting a financial asset to money.

The process of selling Bitcoin for USD has similarities to selling financial assets like gold, stocks, or real estate properties. You need buyers, and sometimes mediators to facilitate a sale. There are many mediators in the Bitcoin market that make buying and selling Bitcoin as easy as logging in to your email. There are also marketplaces for those who wish to conduct sales independently without interference from third parties. Thanks to Bitcoin ATMs, it is even possible to conduct a Bitcoin sale without interacting with anyone whatsoever. 

In the next section, we will go over several methods you can use to cash out Bitcoin and discuss the benefits and disadvantages of each method so that you can pick the best way to turn bitcoins into your local currency (dollarydoos, as we like to call it).

Cashing Out via Cryptocurrency Exchange Platforms

Do you remember how we said there are third-party mediators that make buying and selling Bitcoin as easy as logging into your email? That is not really an exaggeration as you can easily sell Bitcoin through many cryptocurrency exchanges. 

A cryptocurrency exchange platform is basically a marketplace for buying and selling Bitcoin and alternative digital coins (altcoins) like Ethereum or Bitcoin Cash. People list their buy/sell orders on a crypto exchange, and the trading platform matches the orders to facilitate the sale. They are very convenient as you don’t have to search high and low for a buyer for your Bitcoin, allowing you to quickly complete the process and cash out. Bitcoin exchanges are the most common and popular way of buying and selling Bitcoin and altcoins.

In order to use a crypto exchange to buy and sell bitcoins, you have to sign up with the trading platform first and complete an identity verification process, in line with KYC (Know Your Customer) and AML (Anti-Money Laundering) regulations. The ID verification process usually involves providing personal details such as your legal name and phone number, together with an official photo ID, like a passport or a driver’s license. You will be able to buy Bitcoin with fiat currency and sell BTC for USD after you complete ID verification.

Selling Bitcoin on Centralized Exchanges 

There are some important things you need to take into account before signing up for a crypto exchange service to sell BTC. It’s very important to pick a regulated and secure platform that protects its customers. You should also compare exchange rates as the price of BTC varies from one crypto exchange to another. Trade fees and withdrawal fees for Bitcoin transactions vary as well, so pick a crypto exchange that has a more advantageous rate before transferring your assets to their Bitcoin wallet.

3D financial market graph with buy and sell buttons

Also, you should make sure that the crypto exchange service offers a cash withdrawal option for your region so that you can withdraw the money to your bank account after selling your Bitcoin. For example, the popular crypto exchange Coinbase doesn’t allow Australia-based customers to sell BTC on the platform but you can still use other popular crypto exchanges like Binance, Kraken, or Gemini to sell Bitcoin.

Selling Bitcoin on a Peer-To-Peer Cryptocurrency Exchange

You can also sell bitcoins on a peer-to-peer cryptocurrency exchange like LocalBitcoins. Unlike the centralized exchanges we described above, peer-to-peer exchanges connect Bitcoin buyers with sellers. Both parties agree on the price and the method of payment before the sale takes place.

LocalBitcoins is one of the most popular and reputable peer-to-peer platforms where you can sell Bitcoin. Launched in 2012 to let people buy and sell Bitcoin for fiat money, the platform has over a million users around the world.

LocalBitcoins has an escrow service which means that transactions are always guaranteed by a third party. The BTC is sent to LocalBitcoins first, and once the transaction takes place, the escrow service funds the asset to the new owner.

You can use debit cards, credit cards, bank transfers, Western Union, or even PayPal or Amazon gift cards to buy Bitcoin on LocalBitcoins.

LocalBitcoins also requires verification for buying and selling Bitcoin for fiat currencies.

Cashing Out With a Bitcoin ATM

If you are lucky enough to live close to a Bitcoin ATM, or if you don’t mind traveling a bit, you can also cash out Bitcoins through a Bitcoin ATM. You might have trouble withdrawing from a Bitcoin ATM if you are selling huge amounts of Bitcoin but you can also visit several days to sell all your digital assets. 

Man holding phone while using Bitcoin ATM

You can quickly and easily convert Bitcoin to cash using Bitcoin ATMs but there are some drawbacks. Bitcoin ATMs charge very high withdrawal and transaction fees compared to crypto exchanges (up to 8%) so they are not as profitable as other options. 

Bitcoin ATMs are a great way of converting BTC to cash, as long as you are not trading large amounts. While most Bitcoin ATMs don’t require identification, you aren’t able to sell more than 100-200 USD worth of Bitcoin within a day. That means you will have to portion out your transactions if you are looking to sell higher amounts of BTC.

You can only sell a small amount of Bitcoin (around 200 US dollars worth) without ID verification so take a photo ID with you if you decide to take advantage of this method. You can check this map of Bitcoin ATMs around the world to see if there is a Bitcoin ATM nearby.

Selling Bitcoin In-Person

So technically, you don’t need fancy tools or mediators to sell your Bitcoin. All you really need is a buyer willing to pay you the price of your Bitcoin, with a payment method that you find acceptable. All they need is to give you a Bitcoin wallet address you can send BTC to. Sounds easy peasy, but, in person, BTC deals can get complicated and somewhat tiring.

If you are dealing with a friend or a family member, go ahead and sell your BTC and wait for them to transfer the agreed amount to your bank account. If you know and trust the person who is buying from you, selling BTC in person doesn’t pose a risk. However, when you are dealing with strangers, it pays to be cautious. Most buyers and sellers meet on online forums and meet up in person to make the exchange but, as you can guess, it may not always be a safe choice. 

Gold bitcoin on top of USD bills

Take precautions, meet in public places, and educate yourself on the scams that go around the community if you want to sell bitcoins in person.

A Few Words Before You Go…

There is actually no “best way” when it comes to exchanging your Bitcoin for fiat currencies because the answer depends on what you prioritize. For example, do you want to buy and sell BTC regularly? Do you want to sell for the best price possible, or can you accept a lower price for speed? What payment method works for you?

It’s important to consider the questions above before making a decision about how to sell your Bitcoin. Most people prefer to sell BTC on crypto exchanges due to their convenience, and not to mention, competitive fee structures but you should still compare withdrawal limits and associated fees before making a decision. Bitcoin ATMs can be more expensive but some people might like the option of drawing money from an ATM. Finally, peer-to-peer platforms can be a good option, especially if you want flexible payment options. 

Regardless of which method you pick, it’s important to pick a reputable service or a third-party mediator when you are arranging to exchange your Bitcoin for fiat currency.