As the it rises, Cryptocurrency has become synonymous with digital money and financial transactions over the past decade. With the advent of smartphones and faster internet connection speeds, daily payments can be undertaken using crypto. But what happens if or when you wish to convert this to actual hard, liquidated cash which is ready to use? How does it work, what options exist, where can they be used, when do payments clear and why are some superior to others? Let us explore some of the methods to do this:
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- Store your crypto in wallets (hot, cold or software type) and either link them to an exchange or transfer via your bank credit/debit card (subject to country-specific provisions). Coinbase is one such example. Do not forget that there are withdrawal limits imposed and associated with this method.
- Software wallets include Electrum operating using Bitcoin or mycrypto.com for Ethereum based protocol, which is also compatible with and can receive ERC20 tokens.
- Hardware USB based keys, such as Ledger which connect to and access the blockchain.
- Paper wallets containing private keys (but only remain as secure as you can store them).
- Services such as Bitpay enable you to directly pay using Bitcoins and other cryptocurrencies, typically deploying a downloadable virtual withdrawal card to access the account and do so.
- Metal Pay is a KYC enabled money transfer app dealing with various currencies to liquidate Bitcoin and other crypto funds easily.
- Wallet to wallet deposits and transfers connected to your bank account. Simply input the destination address and then track its path via Bitcoin’s Blockchain.com and Ether’s Etherscan.io, respectively. This ensures that the ID entered is both valid and accurate for the timely receipt of funds.
- Third-party brokers or exchanges: akin to forex, however liable to tax, processing fees and is restricted to the same bank account from which it originates (to comply with anti-money laundering policies). Exchange charges can vary and peer to peer options are available. ID proof is required and this process can take around a week. Even ATM Bitcoin debit cards are available (but not in India – yet).
- Peer to peer platforms whereby a trader is selected and then traded anonymously via a VPN. Escrow options to ensure that your bitcoins are only sent upon payment receipt safeguards sellers too. This option is both faster and also often cheaper than exchanges. Cash deposits and withdrawals with ID proof at local participating vendors are also possible, as are interbank transfers. There are various ways to convert crypto into cash with P2P, including using LocalBitcoins for added convenience and speed.
- Alternatively, convert your crypto to stablecoins such as BUSD or using a Binance card or for Fiat currencies, if you wish. At least this ensures that their value is subject to less volatility and fluctuation.
- Invest in the stock market: sounds obvious but instead of the conventional electronic funds, why not trade using a cryptocurrency, such as Bitcoin? It saves time, processing fees and hence is more efficient, potentially lucrative and enables easier transferability.
- Instant digital payment services are also being integrated with cryptocurrencies for faster live processing when purchasing items – which can be just about anything. This enhances the transaction experience with quicker investment to actual liquidity TAT. Such a feat is perfect for those looking to liquidate their investments immediately and still benefit from flexible payment options.
SUMMARY:
In conclusion, there are multiple avenues for converting your cryptocurrency to cash. Whether it is a transfer method, over the exchange or via local peer to peer distribution, there are many options available. Factors that can help you to decide which type of conversion to opt for include: the type of crypto asset you are dealing with, the duration that you need liquidation within (or how long are you prepared to wait for), which region are you operating from (as some nations restrict the use of cryptocurrency) and the availability of resources (in case of requiring prerequisites, including documentation). How you wish to handle your investments and the purpose you are converting them (the reason why – for instance, buying a product/service or simply liquidating it) can influence the method opted for.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect those of Geek Vibes Nation. This article is for educational purposes only.
Caroline is doing her graduation in IT from the University of South California but keens to work as a freelance blogger. She loves to write on the latest information about IoT, technology, and business. She has innovative ideas and shares her experience with her readers.
