Bitcoin might definitely prove to be advantageous for many users and risk takers. The currency of tomorrow, as it is called, has been taking up a huge space in the real economy. However, there are not many places that accept these actual bitcoins for transaction purpose. So how can the bitcoin be used in real life? How can it be converted into real money? Fortunately, there are many ways and a simple procedure to follow to convert bitcoin into usable currency like dollars. This article tries to answer few of the questions above regarding conversion of Bitcoin into cash.
When you should consider buying and selling Bitcoins
It is important to consider various factors before you plan to buy or sell your bitcoin.
According to various researches done by “The Startup,” it was seen that there are few prominent trends in the recent exchange of bitcoins in the market (the data was collected from February 13 to February 27, 2018). Some of the trends are:
- When comparing the price and trading volume 24h (one type of volume data) in a 14-day interval, it was found that:
- When the price is very low (=0.1 at midnight), then the trading volume24h is at its highest peak (=1).
- When the price is at its lowest (=0 at 10:00), then the trading volume is quite low as well (between 0.4 and 0.5).
- When the price is at its highest (=1 at 23:00), then the trading volume is pretty high but not highest.
- When looking at the time/hour with the prices in 14 days, it was found that:
- The price is highest at 23:00 (sell your bitcoin)
- The price is lowest at 10:00 ( buy the bitcoin)
- The price is very low at 00:00 (midnight)
How To Convert Bitcoin into Cash?
There are not many stores which accept bitcoins. Thus it might be difficult to use bitcoins to purchase anything in the real world. Thus conversion of bitcoins to fiat money is vital. There are three ways to convert bitcoin into cash:
- Bitcoin ATM
The growth of bitcoins has led to a growth in the availability of Bitcoin ATMs in major cities around the world. They are a relatively fast way to quickly convert Bitcoin and other cryptocurrencies into real money.
Those people wishing to spend the bitcoins they have earned may easily convert Bitcoin using these ATMs.
Most Bitcoin ATM’s now support other cryptocurrencies like Etherum and Litecoin. Some of them even let the users buy Bitcoins with their real money.
However, there are a few downsides to using Bitcoin ATMs, the first being the high amount of fees to be paid. The fees are much larger than the online service. Secondly, the conversion rates are also lesser than with other methods.
- Online Service
Online services to buy and sell bitcoins for real money is regarded as one of the easiest and less costly ways to do it.
Many sites provide these facilities to its users. Some sites make it possible to purchase and sell other cryptocurrencies as well. Smartphone apps and websites can easily help you convert Bitcoin into real cash.
Coinbase has become a popular service for online conversion of bitcoin into cash. Also, a good alternative would be CoinJar.
These services connect to the traditional bank accounts of the users to pay for crypto coin purchase and also the selling of cryptocurrencies. It can be converted into regular money like dollars and transferred to a bank account.
The transfer takes only a few days. The profits can be cashed out through bank transfer as the crypto coins gain in value. Their accounts will facilitate them to receive cryptocurrency payments which can be later withdrawn as real money.
- Bitcoin Debit Card
One of the most affordable and practical ways to spend cryptocurrencies at traditional retailers is to use Cryptocurrency debit cards.
Bitcoin Debit Cards may be used to buy things from those traditional retailers who may not accept crypto payments but offer support for debit and credit cards.
These cards are powered by either VISA or Mastercard. Thus, these cards can be used for both online and offline shopping for most businesses.
They allow their users to deposit their crypto coins through an online website. Then the cryptocoins are automatically converted into a fiat currency such as the American Dollar or Euro.
However, the thing to note about these cryptocurrency debit cards is that the usage limit and the Availablity may vary according to geographical regions.
Thus it is best to compare the card and find the right one for you. Some of the popular cryptocurrency debit cards are Monaco, Bitpay, CoinJar, and BCCPay.
Best 4 Bitcoin Debit Cards Providers
- Wirex Bitcoin Debit Card
- Cryptopay Bitcoin Debit Card
- Xapo Bitcoin Debit Card
- Uquid Bitcoin Debit Card
3 Steps You Should Know Before Convert Bitcoin into Cash
Following shows the Step-by-step procedure to convert bitcoin into cash:
First Step: Choosing a Conversion Service
1. Firstly, you have to compare the rates offered by different conversion services before choosing the best one. Keep in mind that even when the average bitcoin conversion rate advances, various conversion services will offer different conversion rates.
To put this in practical terms, suppose one service offers to convert Bitcoin at a rate of 1 to $10,000 and another offers to turn one bitcoin into $10,200, so if all the other things are constant, the second service to receive the most out of your bitcoins.Thus a thorough analysis of the conversion rates is required.
2. Another thing to keep in mind is that you must convert bitcoin into cash by using a service which has low fees.
All the conversion services charge a fee for conversion but the select the lowest among them is our real goal. In some cases no matter how much you exchange there is always a flat fee.
While in other cases the conversion service charges a percentage of the amount that you exchange.
Since service fees change over time, keep in mind to check the service’s terms and fee schedule for that particular time and select the best offer.
3. Security is very important in the conversion of bitcoins into cash. Keeping this in mind, it is essential to verify that the service you’re using is safe.
This can be done I several ways. You can check trustworthy sources for reviews that verify the integrity of a given site, and you must ensure that the site the service manages uses https in their URL.
Also, you can use a conversion service which facilitates a two-factor identification, to guarantee that only you will be able to approve bitcoin conversions.
4. After the verification of a safe way to convert, it is necessary to consider the selection of a service which offers low transfer times.
Some sites transfer bitcoins to your account after five daysThe transfer time can take up to 5 days which might make you restless thus it is vital to select much faster services which could take up to only three days or less.
Second Step: Signing up and Uploading Your Bitcoin
1. The basic things to consider while signing up for an account involves providing your personal information like your name, email address, phone number, date of birth, address and others.
Information regarding your bank account, an electronic payment service like PayPal, or both are required.
2. You must select the most secure option to sign up. After the account is created on a bitcoin marketplace, there will be a two-factor authentication.
Here, you will enter a password, and a randomly produced code is sent to your phone.to enhance security, you can also enable a multi-signature option.
It involves multiple independent approvals before making a bitcoin conversion or withdrawal. Theft and hacking of the account will be highly minimized with the use of these security measures.
3. After the creation of an account, you can place your bitcoins in the marketplace.
Depending on the bitcoins currently stored, there will be variation in the mechanism by which you deposit your bitcoins.
In many cases, a one-click way, i.e., by clicking “Deposit bitcoins” near the top of the marketplace’s home page will facilitate you to deposit your bitcoins.
You will have to enter your bitcoin encryption key if it is printed out and if your bitcoins are in a “wallet”, then you might have to upload the file. Customer support will help you if you have trouble depositing your bitcoins.
Check also: Best 3 Hardware Wallets for Bitcoin, and More
Third Step: Doing the exchange
1. The actual exchange is a vital procedure to be considered. It is advisable to convert your bitcoins when the exchange rate is favorable since there is a constant change in the rates.
It is best to wait until the corresponding dollar value rises to convert your bitcoins. Although there is no fixed percentage or value which indicates a favorable exchange rate, the exchange rates must be checked regularly online to see the recent trends.
Also, you can sign up for a service which updates you on the bitcoin-to-dollar exchange rate.
2. Your bitcoins can be sold to another person through some marketplaces. While many others allow you to sell them directly to the marketplace.
After being injected into the marketplace, these bitcoins will be resold to interested buyers later. The specific method that you use to sell your bitcoins will change depending on the marketplace you use.
In most cases, you can simply click on “Sell your bitcoins” to initiate the process of selling. Eventually, the bitcoins will be converted to dollars and transferred to the bank account that you provided earlier.
3. The bitcoins can also be put on the debit card as mentioned above; some marketplaces enable you to load your bitcoins onto a debit card which automatically converts them to dollars.
Through a digital debit card, you can use a string of numbers for online purchases that require dollars. Digital debit cards typically cost about $5, while the regular debit cards cost $15-$20.
4. Your Bitcoins can also be transferred to another digital wallet. Through some conversion services, you can transfer the bitcoins PayPal, Apple Pay, or similar services and convert it into cash.
You need to set your payout method to the digital wallet you want to use. After that, you can sell or transfer your bitcoins to the service of your choice using the marketplace menus.
However, it has higher fees and lower limits than transferring them to your bank account. It is best for people who make digital purchases regularly and don’t have the time to transfer their money from a bank to a digital wallet.
Conversion of Bitcoin into instant, real money makes it easier to use. Before converting the bitcoin into cash, it is essential to remember that once the crypto-coin is converted into fiat money, it will not increase or decrease in value.
So, there is a possibility that you will lose some potential earnings if the coin’s price goes up after the conversion is done. Thus it is advised to keep your cryptocurrency stored in a wallet or online service and to convert it to money only when it is immediately required or convert the amount necessary just for a few months.
During the cases of immediate need of fiat money, more crypto coins can be withdrawn as cash from a Bitcoin ATM or added to a debit card. Although Coinbase or CoinJar are effective ways to transfer your cryptocurrencies into bank account a crucial thing to remember is that it can take between one to five days. Also, one must consider the security factor before the process of conversion begins.