As the cryptocurrency frenzy doesn’t seem to stop, investors worldwide continue investing in these blockchain-based digital currencies. Be it bitcoin, litecoin, ethereum, or other cryptocurrencies; their trading volume is continuously rising. If this makes you want to buy bitcoin in India, go ahead and purchase it from a trusted crypto exchange like CoinSwitch.
But once you’ve got the purchased bitcoin in your wallet, how do you plan to use it? In India, most retailers do not accept cryptocurrency, making it difficult for bitcoin holders to make successful transactions at online/offline stores. Luckily, there is a way around. Bitcoin holders can convert their digital currency into cash to use it for payment at different retail outlets. The process of cashing out bitcoin is pretty straightforward. You can follow any of the methods shared below to convert your bitcoin into cash:
- Crypto Exchange or Broker
One of the most common yet popular ways to convert bitcoin into cash is by using a trustworthy crypto exchange. You just have to create an account on a crypto exchange platform, deposit your bitcoin, and request money withdrawal to your bank account. This method is safe, simple, and reliable, but it involves paying a transaction charge to the crypto exchange. You will also have to wait for at least four days to see the amount in your bank account. This waiting period can vary, depending on one crypto exchange to another.
One thing to keep in mind is to request for withdrawal to the same bank account that you used to purchase bitcoin. This rule was framed by authorities to keep a check on money laundering cases throughout the country. To avoid any hassle, choose a crypto exchange that has been around for years and has a good reputation in the crypto space.
- Bitcoin Debit Cards
Another great way to convert bitcoin to cash or usable currency is by getting a bitcoin debit card. These cards are ideal for those who just want to convert their btc to inr so it can be used to pay bills at different retail outlets.
To get a bitcoin debit card, look for a platform that offers this service. BitPay and Monaco are famous names that issue bitcoin debit cards, but you’ll have to check the location they serve and the withdrawal limits they impose. Bitcoin debit cards are powered by either Mastercard or VISA, so you can use these cards pretty much anywhere, as most places accept cards by Mastercard and VISA for payment.
If you’re a globetrotter, you should definitely get a bitcoin debit card, as they are practical, affordable, and help convert bitcoin into a FIAT currency of your choice.
- Peer-to-Peer Network
If faster transaction speed, reasonable exchange rates, and lower transaction charges are your preference while cashing out bitcoin, you can try any peer-to-peer network available in your country.
What makes this method desirable by many is the option to sell bitcoins directly to an interested buyer. You can also pick a preferred method of getting paid while selling cryptocurrency.
The only downside of this trading on a peer-to-peer network is the high risk of getting scammed by fraudsters. To prevent any scam, look for a peer-to-peer network that offers the option to hold your bitcoins until you confirm the receipt of payment. This lock-in feature is pretty much like escrow that protects the interest of all parties involved.
- Bitcoin ATMs
These ATMs are insanely popular in most major cities across the globe, and they work in the same fashion traditional ATMs do.
The only difference in these ATMs is that instead of using your regular debit cards issued by your bank, you use your bitcoin ATM to withdraw cash from the machine. You can also buy bitcoin from these ATMs, along with a few other popular cryptocurrencies.
Using bitcoin ATMs can be the simplest and most convenient method to cash out your bitcoin; it is extremely expensive than other methods discussed above. The incredibly high transaction fees and conversion rates may make you want to look for other options to cash out bitcoins.
There were a number of ATMs in India until 2018 when RBI notification warned banks from dealing with digital currencies. Currently, there is only one kiosk in Bangalore.
Consideration While Cashing Out Bitcoins
Now that you’re aware of all the methods you can use to convert your bitcoins into cash, you must be aware of some essential considerations. To avoid any unpleasant experience at a future date, always remember the following three things before cashing out bitcoin:
Fees- If you’re using a method that involves the direct transfer of converted money into your bank account, an exchange fee and transaction fee will be levied. The rates, however, can vary from one platform to another.
Taxes- Just because cryptocurrency isn’t formally legalized in many countries doesn’t mean you don’t have to pay taxes on the profits earned. If you’re converting cryptocurrency into cash by transferring it into your bank account, be sure to disclose it in your income tax returns and pay the taxes to avoid penalties or legal consequences.
Speed- Crypto exchange platforms and third-party brokers don’t make instant transfers. You will have to wait for a few days to receive the converted amount in your account. The number of days will vary from one exchange platform to another.
Before you cash out bitcoin, always remember that these digital currencies are highly volatile, and cashing them out at the wrong time can result in significant losses. So considering the time for cashing out can help you remain profitable.