cash for bitcoins

How To Become A Pro At Getting Cash For Your Bitcoins | A How To Guide

You’ve been holding Bitcoin for a couple years and you feel now is a good time to get cash for your Bitcoins and take some of the profits to put a down payment on that new house.  You want to capitalize on that 50% return you’ve made, before the cryptocurrency market corrects.

So, what is the process for getting cash for Bitcoins?

There are a few ways in which you can turn your Bitcoins into cash, but it’s very dependent on how and where you’re currently storing your Bitcoin.  Because, Bitcoin does not possess a physical manifestation, and is simply a type of kinetic energy, management of it becomes a concept which is often hard to wrap ones brain around.

In order to turn your Bitcoins into cash, you must first move the coins from its current storage location, onto an exchange or into a crypto hardware wallet.  Bitcoin and other cryptocurrencies can be stored in a few different ways; here is a rundown of some of the best methods.

These methods are listed in order from the Safest Crypto Storage to the most vulnerable. 

The ‘Cold Storage Crypto Wallet’ or Cold Wallet method (Safest)

A Cold Storage Crypto Wallet is generally the safest means of storing your cryptocurrency coins, because once the coins are in the wallet, there is no need for the wallet to be connected to the internet.

It does require a general understanding of private keys and a basic understanding of wallets because the user is solely in control of their coins and their private keys.  If they are lost, misplaced, or compromised, your coins can be gone, forever.

There is no help center, no online chat, or any kind of support if you make the wrong move, such as trying to send an ERC20 Token on the Bitcoin Network.   Cold Storage of Cryptocurrency is typically done on a hardware device and is meant to be used by someone looking for a long-term solution.  If you purchase a hardware device, it’s imperative you get it straight from the manufacturer.  There are too many examples of these devices being compromised when they are resold by a third party.

The Paper Wallet for Crypto method (Mostly Safe)

A user could create their own paper wallet for crypto here, print it off, and store it in a safe place.

If you go to this site, disconnect your WiFi or Ethernet chord and become totally disconnected from the internet, and this open-sourced javascript will generate an anonymous wallet address for you.  This will be its own unique wallet, with both a public and private key, where bitcoin can be moved to or from.

A paper crypto wallet makes a great storage option assuming the user is adept at keeping track of the paper it’s printed on.  Consider laminating the paper wallet before storing it.

Make sure, once the wallet is generated, avoid using a WiFi enabled printer when you go to print it off, as most all-in-one Wifi enabled printers have storage capacity.  You wouldn’t want your private keys stored in the Printer Buffer, so its best to power it down completely for at least 60 seconds after you print your paper wallet off.

The Hot Crypto Storage Wallet method (Safe)

Hot Crypto Wallets are online wallets where the user has control of both the private and public keys.  Some examples of Hot Wallets are the Exodus Wallet and the Atomic Wallet.  There are lots of hot crypto storage wallets but the concept is exactly the same for each.  The user can download an application on their mobile device and generate a new Hot Wallet address.  The wallet is usually accompanied by a 24 word key phrase which is best kept in a safe place.

The vulnerability with a Hot Crypto Wallet is that the developer of the application also has access to your coins and their customer service may be difficult to contact in the event of an emergency.  You also know little about the company and the creators of the application, and if it were hacked or shut down, it’s quite possible your coins could be lost forever.

Custodial Crypto Wallet (Moderately Safe)

Custodial Crypto Wallets are efficient and easy to use, however these are the most vulnerable crypto wallets and shouldn’t be used for storing large amounts of Cryptocurrencies on, or for long periods of time.  Custodial Wallets usually have easy to use GUI interfaces and are great for those just starting out, and for building a comfort level for Crypto-ownership.

The most popular Custodial Crypto Wallets are: Coinbase, FTX, Gemini, Binance, Celsius, and Crypto.com.  These custodial crypto wallets make it easy to store your coins on, or trade it for a different one. To date only Crypto.com and Binance have ever been compromised and coins stolen from, though in fairness both have indemnified their users who were affected by the compromise by refunding their lost coins.

Now its time to choose the best crypto exchange to move your coins to.

Once you’ve determined which of these types of storage applications you’re using, you must move the coins you want to exchange for cash, out of this current state and onto a Crypto Exchange.  An ‘exchange’ is a platform or application which allows for the swapping of, or purchasing of coins.  The best crypto exchanges are Coinbase, FTX, Binance, and Crypto.com.

These Crypto Exchanges allow you to move your Bitcoin to, and then swap or trade it for Ethereum, Solana, Pokadot, or USDC.  These exchanges allow you to connect your bank account to, then withdrawal dollars directly out of your account to use in exchange for a Crytpocurrency coin, in a matter of seconds.

Most Crypto exchanges are free to set up, but make no mistake they are making copious amounts of money behind the scenes, here is how:

Cryptocurrency Exchanges make money by charging a fee each time you purchase a coin.

Each time you transact on a Crypto Exchange there is a fee associated with the transaction.  The fees vary based on the type of coin you’re purchasing, and on which Exchange you choose.  For instance, making a $1000 Bitcoin will cost you $4.00 on FTX, whereas the purchase on Coinbase may cost you $14.90.  If you’re a trader these fees need to be considered in your overall Return on Investment (ROI).

Cryptocurrency Exchanges make money on the spread.

When you buy a coin on an exchange, you pay a price which is generally higher than the current trading price of the coin.  This is the spread, and the Exchange is making money on the spread.  They secure the transaction for X and charge you Y for facilitating the transaction, and typically Y is around a .5% higher fee than X, therefore enabling the exchange to make money on the spread.

You’ve decided it’s time to cash out your crypto?

First things first, you must get your coins out of its current storage application whether that’s a Cold Storage Wallet, Paper Wallet, Hot Crypto Storage Wallet, or a Custodial Crypto Wallet, and onto an exchange where a trade can be made.  This is simply accomplished by ‘sending’ coins from one wallet address to another.

If you’re using an Exchange to facilitate the cashing out of your Bitcoins, then the wallet address you send your coins to is controlled by the exchange.  It is not associated with your wallet.  This is when your coins become the custody of a third party.

Once the exchange verifies receipt of the coins, you are then ready to trade them for U.S. Dollars.  If you initiate an exchange of Bitcoin to U.S. Dollars, the exchange rate is secured by the platform you’re using.  So, if Bitcoin is trading for $39,000 and you want to exchange .05 Bitcoin for US Dollars, you would offer to trade this on the platform.  Once the trade is complete your .05 Bitcoin would now become $1950.

Getting Cash for Bitcoins

Once your trade has gone through and your .05 Bitcoins now shows $1950 on the exchange, you are free to move the cash you received for Bitcoins into your Fiat Bank Account.  This is done electronically, just as if you were paying your credit card bill online or sending someone a payment through Venmo.

Getting Cash for Bitcoins takes practice, and it’s suggested you get familiar with the process by moving very small amounts from wallet to wallet, and from your exchange to your bank account.  However, once you become familiar with the process, it will become rudimentary and eventually you will be teaching your Aunt Esther how to do it.

Do you have experience with Getting Cash for Bitcoins?

 

 

 

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