Bitcoin is both an accepted and integrated part of the financial and economic marketplace. The Covid-19 global pandemic directly influenced Bitcoin’s major price increase. Between lockdowns and massive stimulus spending, people have begun to lean towards alternative finance solutions in contrast to more traditional models.
The pandemic, among many other factors, has caused investors around the world to become skeptical of market fundamentals. There is also a valid concern regarding inflation, which has left many people searching for an inflation-resistant store of value. And the perfect answer to this is Bitcoin.
Bitcoin was destined to replace fiat currencies, but recent events such as the pandemic have aided this transition. However, there is still a high level of uncertainty surrounding the utilization of Bitcoin. This includes legal and regulatory uncertainty, in addition to a lack of technical knowledge. Many people have still not set up a crypto wallet to facilitate transactions and hold Bitcoin.
Why Bitcoin and Why Cryptocurrency?
Bitcoin is among one of the earliest cryptocurrencies, in addition to being a popular investment choice. Bitcoin has the most trade volume by a significant margin, possessing much of the cryptocurrency market’s clout. Bitcoin acts as a gateway into the world of cryptocurrency, one that both institutional investors and everyday people are looking into.
So what exactly are cryptocurrencies? Cryptocurrencies are a digital form of currency that are cryptographic by nature, meaning they are built on a ‘blockchain’. The economics of this system are established at the outset. For instance, Bitcoin and many other cryptocurrencies have a fixed amount of units available. In layman's terms, this means no additional Bitcoins can be mined after the fixed amount of units is reached. Cryptocurrencies are censorship-resistant, tamper-proof, and decentralized. This enables individuals to not be confined to the centralized currency of their region. Alternatively, individuals are able to choose their own currency!
The blockchain itself is a complex topic, with many moving parts. Blockchain is essentially a series of digital checks and balances that verifies transactions and financial activities. This ensures no transaction can be duplicated or tampered with, allowing cryptocurrency to remain secure. A keyword here is ‘decentralized’. There is no single point of access, so it is much more difficult to disrupt the network.
Blockchain allows users to transfer funds from one wallet to another without any third party being involved in the transaction. This is vitally important in an era of rampant digital privacy intrusions. What’s more, is that it’s cheap, quick and secure to use thanks to innovations such as the Lightning Network and Segwit.
Where is Bitcoin Stored?
Users store Bitcoin in their own personal cryptocurrency wallets. The most important thing to keep in mind is that every cryptocurrency wallet will have its own private key. It may also have a passcode, which is a pointer to the private key (the passcode will reveal or be used as the private key).
The number #1 rule when it comes to cryptocurrency is to store your private keys securely. It is the holy law of cryptocurrency. If you lose your keys, you lose your wallet, meaning you lose your cryptocurrency altogether. There is no team that can help out, a crypto wallet’s information cannot be recovered. The price for having complete ownership of your wallet is that you’re the only person to blame if you lose the keys.
There are thousands of crypto wallets to choose from, and you easily set one up online with just a few clicks. It is often as simple as ‘click here to create a BTC wallet’. After the wallet has been created, you will be assigned a private key. Users must store this key securely, it is recommended to take at least 2 copies for safekeeping.
Some people also opt for Bitcoin hardware wallets, which are often seen as more secure since Bitcoin can be stored offline. A hardware wallet can be plugged into a computer and connected to the internet. Utilized when users wish to make a transaction, transfer Bitcoin, or withdraw Bitcoin. These may cost anywhere between $30 - $100. While online wallets are usually the best option, since they are free.
Now that you understand the basics of how Bitcoin is used and stored, let’s take a look at how to withdraw Bitcoin from your digital wallet.
How do I Cash Out my Bitcoin?
There are a variety of ways to cash out on your Bitcoin holdings. You could visit some of the larger exchanges such as Coinbase, Kraken, Binance, or Gemini. Where users will connect their bank account to these crypto exchanges. Your crypto can be stored on these exchanges and you can sell them in exchange for fiat currency in your account. You then send the fiat proceeds to your connected bank account. In order to do this, you will have to pass KYC verification procedures through the exchange.
If you don’t have an account with a digital wallet provider and you wish to use one to withdraw Bitcoin, you’ll first have to create an account and connect your bank account to it. These online exchanges will usually only allow users to connect one bank account to their platform. This practice is standard in order to comply with Federal regulations. The typical KYC verification procedures will include submitting photos, submitting a government-issued ID, and submitting a bank or utility bill.
However there are many ways to liquidate Bitcoin aside from exchanges. A plausible alternative is to use a Bitcoin ATM and convert your crypto to cash directly. To liquidate small amounts, you can even bypass the typical KYC procedures. There are other smaller exchanges that allow you to sell your Bitcoin for cash without undergoing KYC, such as HODL HODL. You can also just buy products directly, including flight tickets, hotel bookings, clothes, Giftcards, and even property.
Your Bitcoin can be linked to a fiat card so you are cashing out by making a purchase. There are also a number of decentralized finance applications that are becoming available to Bitcoin users. However, this article will primarily focus on how to withdraw Bitcoin from a crypto exchange as this is the most common option.
After accessing your Bitcoin through your digital wallet, the next step is to withdraw Bitcoin is to sell your Bitcoin for any fiat currency of your choice. From there transfer it to your bank account.
How Can I Sell Bitcoin for Cash?
Bitcoin is a digital asset, meaning it must be exchanged for fiat currency (USD, EUR, etc) before you can cash out. The value you receive when selling Bitcoin depends on the crypto market and the levels of supply and demand. Additionally, there may be a markup by the exchange as well as network fees.
Buying and selling fees can be in the range of 3% - 10% so take note. Cryptocurrencies are also known for their inherent volatility. Bitcoin prices can also vary across exchanges, which is important to keep in mind when your goal is to buy and exchange Bitcoin.
Most crypto exchanges will offer similar exchange rates between Bitcoin and other currencies like the US dollar. When you sell Bitcoin, the fiat cash will be stored on your exchange account. Which means you will get a fiat wallet and a crypto wallet when using exchanges.
You may also have the option of converting Bitcoin to a Stablecoin tied to a fiat currency such as the US dollar, using that to cash out instead. Stablecoins remove the volatility associated with cryptocurrencies and this innovation has introduced more investors to the market.
The next step to withdraw Bitcoin and cash out is to transfer the money you’ve received from the sale to your bank account.
How do I Transfer Bitcoin to my Bank Account?
The majority of users will not withdraw Bitcoin directly, but will instead convert it to a fiat currency first. From there it will then be transferred to their bank account. Users also have the choice of withdrawing the BTC to their own personal cryptocurrency wallet, using an alternative method of ‘cashing out’.
Most exchanges will only allow you to have one bank account associated with your profile on the exchange. This bank account must be verified by being used to buy cryptocurrency. For this reason, many crypto exchanges and digital wallets advise using their platform to buy some Bitcoin before selling it for fiat cash.
After your account has been verified you will likely be presented with a ‘Withdraw’ button to convert your crypto to fiat cash. For instance, on the Coinbase exchange, a user needs to click the fiat currency they wish to transfer (such as USD or EUR). From there a withdraw button presents itself. When you click this button, the fiat cash is automatically transferred to your bank account.
Other cryptocurrency exchanges and digital wallets might use different terms or incorporate a button marked as “transfer to bank”. Typically, this option should not be difficult to find. Using digital wallets to withdraw Bitcoin is a fairly common function of these applications. After all, everybody wants to transfer to Fiat to purchase necessary items.
The amount of time a withdrawal takes will depend on the digital wallet and crypto exchange. This time can also be influenced by the bank you use. When converting crypto to Fiat, it will also depend on the network activity your cryptocurrency software provider is experiencing, which could be elongated due to network congestion.
What Happens When You Sell Bitcoin?
The vast majority of Bitcoin sales occur through online crypto exchanges. Much like traditional financial markets, these exchanges handle the transactions of buyers and sellers. When you sell Bitcoin, it is passed on to whichever online exchange you use, and from there it can be bought or traded by other users on that exchange.
Supply and demand directly influences Bitcoin’s value, increasing its value when demand exceeds supply, decreasing it when supply exceeds demand. If you’re familiar with how traditional exchanges function, then this is likely an easy concept to grasp.
However, this is not the case when you choose to sell Bitcoin without using a crypto exchange. Remember, Bitcoin was originally designed as a peer-to-peer (P2P) digital currency. Bitcoin users can transfer Bitcoin to anyone with a digital wallet capable of receiving it. In fact, this design was intended to allow two people to come together for a transaction, much like a barter system! This happened quite a lot, especially in the early days!
Transferring Bitcoin is very straightforward. Within your digital wallet, click the “Send BTC” option. Enter the transaction amount in BTC and then enter the QR code/wallet address of the recipient. Copying and pasting the QR code is the safest way to perform this task.
The Safe Sale of Bitcoin
With P2P Bitcoin transactions, the problem arises in terms of getting paid for your transfer. A third-party application is often used so that the BTC is held in escrow until the seller receives the payment. Platforms such as Local Bitcoins exist to validate this peer-to-peer payment process.
After creating an account you can list the amount of Bitcoin you want to sell as well as the payment terms. You might want the spot price of Bitcoin + 3% paid via ACH wire transfer. You can advertise these terms, build up your reputation, and even create a solid business
After the buyer has paid you for the Bitcoin, they will confirm the payment has been made, at which point you will be notified by the platform directly. When you receive your payment, you confirm the transaction and remove the funds from escrow. They are then sent to the buyer’s wallet.
Never sell your bitcoin without using a reputable third-party system along with an escrow system. Scammers are everywhere in the cryptocurrency industry, which is why KYC is so important.
Face-to-face transactions are also made possible when it comes to the sale of Bitcoin. To sell Bitcoin face-to-face, you must connect with a buyer via Local Bitcoins or a similar peer-to-peer platform. A time and place to meet are agreed upon (often a coffee shop).
After meeting the buyer in person, they can pay you in cash for your Bitcoin. Which you send to their digital wallet by using either the address of their digital wallet or a QR code that represents the address. Exercise caution when doing this, especially where large amounts of cash are involved. You have no protection other than your own powers of judgment and common sense.
Of course, we recommend our services instead and are always willing to discuss safe sale buying and customized services through our support email or phone, but it’s important to share the various methods of purchasing Bitcoin.
How Long Does It Take to Transfer Bitcoin to my Bank Account?
The time taken to transfer Bitcoin to your bank account can vary tremendously. All bank transfers will have a time delay due to a variety of reasons. The cumulative time will depend on which crypto exchange/digital wallet you use. When using exchanges, it will also depend on whether they are experiencing technical difficulties or liquidity problems.
With this said, most of the time you can expect the funds to be available in approximately four to six days. This total time can vary depending on multiple factors, so you should not count on this money being available immediately.
You should also consider that some exchanges/digital wallets will charge a fee when you withdraw Bitcoin and transfer it to your bank account. The good news is those withdrawal fees are often far lower than buying/selling markup fees.
For most exchanges, such as Coinbase, you can expect withdrawal fees to be about 1% of the amount being withdrawn. Network fees will also need to be taken into account, though the Bitcoin network fees are much lower than they once were.
Network fees are generally not exorbitant, but they vary depending on the cryptocurrency being used. They go to compensate those who run the network. In the case of Bitcoin, this would be the Bitcoin miners.
After the funds have been successfully transferred to your bank account, you can access the money as you normally would. You can write checks and use your debit card as normal. Remember, however, that when you convert Bitcoin to fiat cash you are subject to tax on the profits you make, so keep records when possible.
How Do You Use A Bitcoin ATM?
Bitcoin ATMs (BTMs) appear to be similar to traditional ATMs however they serve a very different purpose. Traditional ATMs are typically used to withdraw money from a bank account. However, since Bitcoin exists only as a digital currency, you cannot physically withdraw it from a traditional ATM.
What you can do is sell your Bitcoin in exchange for fiat cash when using a Bitcoin ATM. You may also sell and exchange Bitcoin for fiat cash, then withdraw it from the Bitcoin ATM. However there are a few additional steps you need to take first.
You have to make sure that the Bitcoin ATM you wish to use is compatible with your digital wallet and the crypto exchange. First-time users will sometimes be required to show or submit a government-issued ID, their phone number, and a picture of themselves taken by the Bitcoin ATM camera.
After identity verification is complete, you can scan the QR code of the digital wallet address that appears on the Bitcoin ATM. Send the exact amount of Bitcoin that is equivalent to the dollar amount you intend to withdraw. When the Bitcoin has been sent to the digital wallet, the cash equivalent will be dispensed from the Bitcoin ATM.
Bitcoin ATMs do charge fees that are higher than legacy ATMs. For this reason, you won’t get the same amount of money that corresponds to the Bitcoin spot price. Most Bitcoin ATMs disclose the fees they charge when using them, but some do not.
If the fees are not apparent, it might be a good idea to look up the company providing the Bitcoin ATM to learn more information on what they generally charge.
How do I Withdraw Money from a Bitcoin ATM?
The Bitcoin ATM generates a digital wallet address where you will send your Bitcoin. Which means you are essentially sending the amount of Bitcoin that is equivalent to the cash you wish to withdraw. You will either receive cash from the Bitcoin ATM or a redemption code that can be used to receive cash when the transaction has been processed.
Withdrawing cash from a Bitcoin ATM can take a little longer than traditional options, however the time difference is miniscule. It is possible for the transaction to take 10-20 minutes total. Keep in mind that Bitcoin ATMs have to comply with the rules and regulations of their jurisdiction. A number of different laws govern ATM transactions in different locations. It is important that these laws may vary depending on geographic location.
Some countries have outlawed Bitcoin ATMs, for a variety of reasons. While other countries require that each ATM have a Money Transmitters License and certain US states also mandate this. Practically all regions require Bitcoin ATMs to be configured in line with Anti-Money Laundering (AML) laws.
The AML laws mandate that Bitcoin ATM owners integrate Know Your Customer (KYC) features into the ATM. This is the main reason why nearly all Bitcoin ATMs require users to submit information about themselves including a government-issued ID in order to use the machine.
In order to withdraw Bitcoin from a Bitcoin ATM, you’ll need to sell your Bitcoin for a fiat currency through it. Luckily, this is quite an easy process when using Bitcoin ATMs. You may also choose the amount of fiat currency you want to receive. This will correspond to an equivalent amount of Bitcoin which you will sell using the machine.
The ATM will generate a QR code for the digital wallet address where you will be sending the Bitcoin. You must then send the exact amount of the Bitcoin to that digital wallet. After that transaction is complete, you will be able to withdraw cash from the ATM.
The blockchain network must verify transactions on the network. On the Bitcoin blockchain, this is done through mining ‘confirmations’. But some Bitcoin ATMs will release cash before all confirmations have been completed, which can save you time.
The process should not take longer than 15 minutes and you will typically get an SMS notification when the transaction has been completed.
Where are Bitcoin ATMs Located?
Bitcoin ATMs are often located in areas where you would normally find regular ATMs. A prime location for them tends to be malls, as people need cash in these areas. Giving shoppers the ability to access purchasing power from their Bitcoin holdings can boost sales for surrounding businesses.
Restaurants, coffee shops, and retail outlets are other areas where you can expect to see many Bitcoin ATMs. For many of these businesses, a Bitcoin ATM can draw in potential customers who are crypto enthusiasts. They might make a purchase and decide to become familiar with the establishment.
Finding a nearby Bitcoin ATM can be problematic at times, a number of services are available to make the process easier. Some of the more well-known platforms for finding Bitcoin ATMs include Bitcoin of America, Coin ATM Radar, and Bitcoin ATM Near Me.
Even highly-trafficked websites such as Google can be used to locate Bitcoin ATMs. You can simply enter a query like “Find Bitcoin ATM Near Me” and receive quick, accurate results. Click on the closest Bitcoin ATM and then get directions to it via Google Maps.
How do I Convert Bitcoin to Cash App?
Cash App is a common application for the transaction of Bitcoin. This fintech platform is really helping to popularize Bitcoin. Cash App can also be used to withdraw Bitcoin easily, affordably, and quickly.
Cash App is led by CEO Jack Dorsey, who is known as being the Founder of Twitter. He is also a prominent Bitcoin enthusiast and has expressed his opinion that Bitcoin is the currency of the future. Jack is actively working to make Bitcoin a central part of the Cash App. Jack’s team is busy building features into the platform that make it easier for everyday consumers to use Bitcoin.
To convert Bitcoin to Cash App, you will first have to set up an account on the platform. When creating your account, Cash App will send you a code through SMS or email. You must confirm this in order to verify your identity. Once this has been done, you can link your debit card and bank account to Cash App for easy Bitcoin transactions.
After setting up your account, you can convert Bitcoin to fiat currency within the Cash App. This is done by transferring the Bitcoin you own within another digital wallet to your Cash App account. This process is straightforward. First, tap the Bitcoin icon on the Cash App home screen, then click the “Deposit Bitcoin” button.
Cash App will then display your digital wallet address for transfers. This address can be used in your other digital wallet to send Bitcoin to the Cash App address.
In a 7-day period, you can only transfer up to $10,000 worth of BTC to Cash App. You should also be aware that the transfer can take a number of hours to complete depending on network congestion. Still, these stipulations should be more than enough for the majority of consumers.
Cash App generates a new digital wallet address each time you initiate a transfer. So the same address cannot be used again. This is a brilliant innovation, since it enhances security without reducing speed or efficiency. You are still simply copying and pasting a QR code, which is very fast.
Cash App focuses on Bitcoin alone, meaning you must convert any other cryptocurrencies you have to Bitcoin first before using Cash App.
How do I Withdraw Money from my Bitcoin Wallet to my Bank Account?
Users don’t actually transfer money from their Bitcoin wallet to their bank account. It is important to note that most banks don’t recognize Bitcoin. Users have to sell it on a crypto exchange first, then transfer the fiat proceeds (EUR, USD, GBP) to their bank account.
You will first have to sign up for a cryptocurrency exchange and sell your Bitcoin there. After KYC verification has taken place, you can then withdraw to your bank account.
Some of the more popular exchanges include Coinbase, Kraken, Binance, and Bittrex. While there are many other reputable exchanges you can sign up to use. Users must take note of fees and eligibility requirements when using a crypto exchange.
Next, you will need to use the exchange to sell your Bitcoin for fiat currency such as US dollars. After successfully selling your Bitcoin, the currency you receive will show up as a balance in the digital wallet associated with the exchange.
Your bank account will need to be linked with your crypto exchange if you want to withdraw funds. After identity verification has been completed and your bank account has been connected to the exchange, withdrawal should be quite easy. The instructions to withdraw Bitcoin will be provided via a guide on the exchange, in most cases.
Wrapping it up: How to Withdraw Bitcoin
Hopefully, this guide has provided you with a clear picture of how to withdraw Bitcoin. Whether you make use of online exchanges, peer-to-peer platforms, or Bitcoin ATMs, the ability to withdraw Bitcoin is critical and quite easy. Dive right into the world of crypto starting with a small Bitcoin withdrawal. The future of currency is almost certainly going to be cryptographic and its best to get started sooner rather than later.
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