Bitcoin has hit unimaginable highs and it’s time for you to cash out? But you’re wondering how you can do it safely… well not to worry! We’ll guide you through step by step on how to withdraw your bitcoin from your wallet or exchange it and turn it back into that sweet cash.
We’ll be using the exchange Bitbuy for our example, as we have reviewed it extensively. If you want to sign up to Bitbuy, click here.
And in case you don’t use Bitbuy – don’t worry as most exchanges will be very similar when withdrawing your bitcoin. All you need to make sure is that the exchange you use can pay fiat back into your bank account.
Other than exchanges, there are several other ways to cash out and we’ll give you everything you need to know so you can decide what you’re comfortable with!
Ways To Withdraw Bitcoin
The main two ways to withdraw your digital currency is through either an exchange or through peer-to-peer. With an exchange, you’re able to sell your bitcoin fast with their market system. Then after you sell your bitcoin into fiat, the exchange can pay the money out into your bank account.
If you want to go through the peer-to-peer method, the best site for those is Paxful and LocalBitcoins. On these sites, you can meet up with people in person and do a manual trade. The benefit of doing it this way is if you don’t want to go through any Know Your Customer protocol exchanges have.
A third way which is similar to the peer-to-peer method is the use of bitcoin ATMs. These machines can be found scattered in airports, supermarkets, grocery stores etc. Note that some of these machines will require taking your photo but some don’t as well. Another thing to keep in mind when using these bitcoin ATM’s is the selling price on your bitcoin is generally lower compared to exchanges.
How to Cash Out Bitcoin with An Exchange
We’ll walk you through step by step using Bitbuy to withdraw CAD from, as they are one of the best exchanges to use in Canada.
First log into your Bitbuy accounts. Then after you have gone through your 2FA and successfully logged into your accounts, click “wallets” from the main page.
Assuming you already have bitcoin or other currencies, (If not, we’ll walk you through how to get it on Bitbuy in the next section) click “sell” on the wallets page.
You’ll immediately have your bitcoin exchanged into CAD and you’re ready to have it withdrawn to your bank account.
You’ll be able to choose your payment method to get the money sent – we recommend using the Interac e-transfer method. It’ll take 1-2 business days for the money to clear into your bank account and you’re all set!
How to Cash Out Bitcoin From a Wallet
If you’ve taken some safety steps and took your bitcoin out of exchanges… and it now resides in your ledger wallet or other external wallet, don’t worry as converting your cryptocurrency into cash is super simple!
In this example, we’ll use the Ledger Live app to demonstrate. Keep in mind no matter what bitcoin wallet you use, it will almost be the exact same steps.
So in your wallet, click on “Send”.
Then a field should pop up asking you to put the bitcoin address you want to send to. And it will work the same way emails work.
If you want to sell on Bitbuy, go into your Bitbuy account, then click “Deposit”. Once you do, Bitbuy will reveal your Deposit address. Copy that and then go back to the wallet where your bitcoin resides and paste your Bitbuy deposit address in the send field of your bitcoin wallet.
The best way to think about sending cryptocurrency is like having a house address. Each ‘wallet’ you own has its own address.
After you pasted your Bitbuy wallet address into your personal bitcoin wallet to send to… make sure to double-check that you have not copied the address wrongly. As once you send, you cannot reverse the transaction.
Click Send when you’re all good to go and all you have to do now is follow the steps above on how to sell using Bitbuy!
Important things to consider when withdrawing bitcoin for cash
When withdrawing your bitcoins, there are a few things to consider just before you do.
The security aspect is something you generally don’t have to worry about if you’re withdrawing from a reputable exchange. However, if you’re looking to go the peer-to-peer route, then security is a huge aspect to look out for in case the other party is not trustworthy.
Most exchanges have some sort of withdrawal fee when converting your bitcoins to fiat currency. The fee could vary from $5 or $25+ depending on the exchange. You would also be required to wait a few business days for the transaction to clear into your bank account.
When you sell bitcoin today or the next day, you could potentially gain a lot or lose a lot on the downside as bitcoin is known to have rapid rallies and price drops. So if you’re looking to sell, don’t wait too long!
Investing in cryptocurrencies and bitcoin are generally considered as capital gains income in most countries. This means you have to remember to declare this on your tax returns and pay the profit to the tax departments. Consult your tax advisor if you’re unsure of what to do.