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How to Cash Out Bitcoin for Real Money in 2024

Eliman Dambell
Last updated: | 9 min read

Cashing out Bitcoin for real money is a critical aspect of managing your cryptocurrency investments. As Bitcoin continues to grow in popularity and value, knowing how to convert it into fiat currency is essential for many investors. Whether you’re looking to make a substantial purchase, pay bills, or simply secure your profits, understanding the best methods to cash out Bitcoin is crucial.

There are several methods to convert your Bitcoin into real money, each with its own advantages and disadvantages. The method you choose will depend on factors such as convenience, fees, and the speed of the transaction. In this guide, we will explore three of the best ways how to cash out Bitcoin 2024.

Bitcoin USD

3 Best Ways to Cash Out Bitcoin for Real Money


Cashing out Bitcoin can be done through various platforms, but the three main ways to do so are through centralized exchanges, peer-to-peer (P2P) exchanges, and Bitcoin ATMs. Each method offers unique benefits and may suit different needs and preferences.

So, for those of you asking if you can cash out Bitcoin for real money, here are the best methods to consider

1) Centralized Exchanges – Cheapest Way to Convert Bitcoin to Cash

  • Average Fees to Sell: 0.1% to 1%
  • Withdrawal Speed: A few hours to 1-5 business days

How can you sell crypto for cash? Centralized exchanges are one of the most popular and straightforward ways to convert your Bitcoin holdings into fiat currency. Crypto exchanges offer a user-friendly interface with a variety of withdrawal options, making them ideal for both beginners and experienced traders.

These options include bank wire transfers and debit or credit card withdrawals. Typically, bank wire withdrawals take a few days to process and can be longer than card withdrawals.

Step-by-Step Guide to Cashing Out on a Centralized Exchange

1. Sign Up and Verify Your Account: Choose a reputable exchange such as Binance. Create an account and complete the necessary identity verification (KYC) process.

Binance onboarding

2. Deposit Bitcoin: After verifying your account, you will be able to transfer your Bitcoin from your wallet to the exchange’s Bitcoin address.

KYC on Binance

3. Sell Bitcoin: Navigate to the trading section of the exchange, select Bitcoin, and choose the fiat currency you wish to sell for. Enter the amount and execute the trade.

4. Withdraw Fiat: Once the sale is complete, go to the withdrawal section and select your preferred withdrawal method (e.g., bank transfer, PayPal). Enter your bank details and the amount you want, then withdraw Bitcoin to your bank account.

Bitcoin Binance

Pros and Cons of Centralized Exchanges

Pros

  • User-friendly interface
  • High liquidity and trading volume
  • Multiple withdrawal options

Cons

  • Requires identity verification (KYC)
  • Potentially higher fees for withdrawals
  • Not available for all fiat currencies

It is important to note that not all exchanges offer fiat withdrawal services, and tightening regulations may limit availability. This method may not be suitable for less popular fiat currencies.

2) P2P Exchanges – Sell Bitcoin for Cash With No KYC

  • Average Fees to Sell: 0% to 1%
  • Withdrawal Speed: Instant to a few hours

Peer-to-peer (P2P) exchanges facilitate direct trading between buyers and sellers without the need for a middleman. P2P exchanges make it possible to sell Bitcoin without extensive KYC processes. Here is a brief overview of how to turn Bitcoin into cash using them.

Step-by-Step Guide to Cashing Out on a P2P Exchange

  1. Sign Up and Create a Listing: Register on a P2P exchange like BinanceP2P or Paxful. Create a listing indicating the amount of Bitcoin you wish to sell and your preferred payment method.
  2. Find a Buyer: Browse through buyer offers or wait for a buyer to accept your listing to purchase Bitcoin from you. Communicate with the buyer to confirm details.
  3. Complete the Trade: Use the platform’s escrow service to hold the Bitcoin until the buyer makes the payment. Once you receive the payment, release the Bitcoin from escrow to the buyer.

Pros and Cons of P2P Exchanges

Pros

  • No KYC required
  • Flexible payment options
  • Potentially lower fees

Cons

  • Risk of fraud or scams
  • May require manual negotiation
  • Lower liquidity compared to centralized exchanges

It is important that you are aware of potential frauds from unauthorized platforms, despite the convenience of this method of withdrawal. You will be transferring Bitcoin to a stranger, and there are limited recourses should something go wrong. Alternatively, should you want to know how to turn Bitcoin into cash instantly, let’s discuss this next.

3) Bitcoin ATMs – Turn Bitcoin into Cash Instantly

  • Average Fees to Sell: 5% to 10%
  • Withdrawal Speed: Instant

When you think of how to convert crypto to cash Bitcoin ATMs come to mind. These allow users to convert Bitcoin into cash quickly and conveniently. These machines are available in many locations worldwide and offer an easy way to access funds. Despite there convenience, they are not the cheapest way to convert crypto to cash. Some will also let you deposit cash and receive Bitcoin in return.

Bitcoin ATM withdrawal

How Bitcoin ATMs Work

  1. Find a Bitcoin ATM: Use an online map or app to locate a Bitcoin ATM near you.
  2. Verify Your Identity: Depending on the machine, you may need to provide identification or a phone number.
  3. Deposit Bitcoin: Scan the QR code provided by the ATM to send your Bitcoin.
  4. Withdraw Cash: Once the transaction is confirmed, the machine will dispense cash.

Pros and Cons of Bitcoin ATMs

Pros

  • Instant cash withdrawal
  • No need for a bank account
  • Easy to use

Cons

  • High fees
  • Limited locations
  • Withdrawal limits

Bitcoin ATMs are regulated in most countries. In the US, they must be registered with the Financial Crimes Enforcement Network (FinCEN), while in Canada, each state can set its own regulations. Notably, Bitcoin ATMs are heavily restricted in the UK, and there are no regulated Bitcoin ATMs operating there.

Things to Consider When Cashing Out Bitcoin


Cashing out Bitcoin involves more than just deciding to sell; there are several factors to consider to ensure you get the best value and maintain your security and privacy. From understanding exchange rates and fees to navigating security concerns and tax implications, each step requires careful attention to detail.

By considering these factors, you can make informed decisions that optimize your returns and minimize risks. Now let’s explore the specific elements to consider, such as exchange rates, security risks, privacy, and tax implications when withdrawing Bitcoin.

Exchange Rates and Fees

When cashing out Bitcoin, it’s essential to look closely at the exchange rate offered and the fees associated with the transaction. Different platforms and methods can have varying rates and fees, which can significantly impact the amount of money you receive.

Centralized exchanges like Binance typically offer the most competitive exchange rates and lowest fees, making them a popular choice for many users. However, it is still crucial to compare rates across multiple platforms to ensure you’re getting the best deal.

Security and Risk

Different methods of cashing out Bitcoin come with varying levels of security and risk. Here are some common methods and their associated risks:

  • Centralized Exchanges: These are typically secure but require you to trust the platform with your funds and personal information. By having your details exposed to a central platform, you can be more susceptible to hacks and attacks. Prior to collapsing, FTX suffered a $415 million hack, which resulted in customers losing their assets.
  • P2P Exchanges: Potential risk of fraud or scams as Bitcoin transactions are conducted directly between users. Due to the fact that there are no intermediaries or central authority overlooking the process, you will need to do your own due diligence.
  • Bitcoin ATMs: Convenient and anonymous but can have high fees and limited availability. Although more are popping up, you will not find them as readily accessible as fiat ATMs. Meaning that those who offer them will charge a higher premium.

Among these, centralized exchanges are generally considered the safest due to their robust security measures and regulatory compliance. However, always ensure to use reputable platforms and enable all available security features to protect your funds.

To learn more about the best crypto security techniques, read our guide on the subject.

Privacy and Anonymity

Privacy and anonymity are significant considerations when cashing out Bitcoin. Centralized exchanges typically require users to complete Know Your Customer (KYC) procedures, which involve providing personal information and identification documents.

This process ensures compliance with regulations but may not appeal to those who prioritize privacy. On the other hand, Bitcoin ATMs and P2P exchanges often have more relaxed requirements, allowing for more anonymous transactions. However, these methods might come with higher fees or additional risks.

Tax Implications

When converting Bitcoin to fiat currency, it is crucial to understand the tax implications. Depending on your jurisdiction, selling Bitcoin may trigger capital gains tax or other tax liabilities. It is essential to keep accurate records of your transactions and consult with a tax professional to ensure compliance with local tax laws. Using crypto tax software can simplify this process by tracking your transactions and calculating your tax obligations.

Conclusion – The Best Way to Cash Out Bitcoin


After learning how to withdraw Bitcoin, you should have discovered that the best method depends on your individual needs and priorities. Centralized exchanges offer the most competitive rates and lowest fees, making them an excellent choice for many users.

However, if privacy and anonymity are your primary concerns, Bitcoin ATMs or P2P exchanges might be more suitable despite their higher Bitcoin transaction fees and potential risks. By carefully considering exchange rates, security, privacy, and tax implications, you can choose the method that best aligns with your goals and circumstances.

FAQs

Can I cash out Bitcoin for real money?

Yes, you can cash out Bitcoin for real money using various methods such as centralized exchanges, P2P exchanges, and Bitcoin ATMs.

Can I turn Bitcoin into cash instantly?

Yes, using Bitcoin ATMs can allow you to turn Bitcoin into cash instantly.

What is the best way to turn Bitcoin into cash?

The best way to turn Bitcoin into cash is typically through a centralized crypto exchange due to competitive rates and low transaction fees.

Can you sell Bitcoin for US dollars on exchanges?

Yes, you can sell Bitcoin for US dollars on many centralized exchanges like Coinbase and Binance.

References

  1. Why are Bitcoin ATMs popping up? (CNBC)
  2. Crypto should focus on security, but maintain innovation (Forbes)
  3. FTX suffered $415 million hack (BBC)
  4. KYC procedures help to prevent anti-money laundering (Reuters)