Welcome to our guide about how to convert bitcoin to cash. If you’ve ever wondered, “how do you convert bitcoin to cash?” you’re in the right place. Below you’ll find answers to questions including:
- Can you convert bitcoin to cash?
- How do I convert bitcoin to cash?
- Can I convert bitcoin to PayPal?
Can You Turn Bitcoin Into Cash?
In short, yes! It is possible to convert bitcoin (BTC) into hard cash, or fiat, money. But before we get into our guide for exchanging bitcoin for cash or converting bitcoin into PayPal, let’s establish some background knowledge first.
What is Bitcoin?
Bitcoin is the most prevalent and oldest type of cryptocurrency. Cryptocurrency is a digital currency meant to replace traditional currency in performing online transactions with a measure of anonymity and security. Created in 2009 by a group of programmers under the alias “Satoshi Nakamoto,” Bitcoin was billed as the first “peer-to-peer electronic cash system.”
Unlike traditional currency systems, Bitcoin is completely decentralized: there is no authorizing Bank of Bitcoin that controls supply. When you purchase bitcoin, you buy from a private individual who wants to sell bitcoin. This means you have more options for exchanging bitcoin for cash than with traditional money systems, but also take on more risk.
Bitcoin transactions are recorded in a Blockchain; basically, a ledger for all transactions ever completed using bitcoin. Just like fiat monetary systems, bitcoin’s value depends on Bitcoin users collectively accepting that Bitcoin has value in the real world.
You can find a comprehensive cryptocurrency primer here.
How is Bitcoin Different from Cash?
Bitcoin might be valued against traditional currencies like the US dollar, but there are several significant differences Bitcoin users must account for when investing.
First, bitcoin is not sovereign, which means it’s not backed by a country, bank, or payment processor like Visa. While this might make BTC seem a bit scary, the flip side is Bitcoin, in theory, exists independent of any country or company’s financial situation.
It’s also important to remember that each and every BTC transaction is recorded in the Blockchain, which is publicly accessible and immutable. Take care to only engage in legal transactions with reputable parties.
How To Exchange Bitcoin to Cash
OK, so you have all this bitcoin. But how to convert bitcoin into cash? There are a few considerations before you select whether the best way to convert bitcoin to USD:
- Where you want your money deposited (bank account of PayPal)
- The currency in which you want to receive your money
- Fastest method vs. cheapest method
- How long you can wait before receiving cash
Here are the best ways to convert bitcoin to perfect money.
Where to Convert Bitcoin To USD
Can you convert bitcoin to USD? Yes you can. But where to convert bitcoin to USD? Because anyone who owns bitcoin can sell it, you have a range of options for exchanging bitcoin for cash. Check out how and where to convert bitcoin to USD.
A third-party broker is the same as an exchange. There are myriad Bitcoin exchanges so we recommend Coinbase. It’s one of the oldest and arguably the most prominent, which is important because you want your broker to be as transparent and accountable as possible.
A (mild) inconvenience of using a broker is users must withdraw funds to the same account that they used to initially deposit. This means that, before you can convert bitcoin to cash, you must deposit fiat money into the brokerage site. Make sure you use the account you want to be used for BTC transactions.
Cashing out on brokerage sites takes between 1-5 days before the money is deposited in your account. For folks dealing in euros, payments are made with SEPA. The best way to exchange bitcoin for USD is via the SWIFT method.
You can find a detailed guide for using Coinbase here.
Peer to Peer
If you prefer a little more anonymity and/or don’t want to wait 1-5 days to exchange your bitcoin for cash, consider transacting with a Bitcoin-owning peer. We recommend peer to peer trading for people with a few months of experience under their belt on sites like Coinbase.
A huge risk with peer to peer trading is the chance the other party might be looking to defraud you. That’s why we like LocalBitcoin’s escrow feature. With an escrow, neither party receives anything (money or bitcoin) until their interlocutor chooses to release it.
So let’s say I want to buy 1 bitcoin from you because you accept bank transfers as a payment method. You agree and put the bitcoin in the escrow until I pay you the agreed-upon amount. As soon as you’ve received my payment, you release the bitcoin to me, and the transaction is complete.
How to Convert Bitcoin to PayPal
Converting bitcoin to PayPal is relatively simple if you think about PayPal as simply another payment option like a bank transfer.
Again, Coinbase and LocalBitcoins are our picks for converting bitcoin to dollars for their transparency and anti-fraud safeguards. You can also use Paxful to try your hand at being the seller in a peer to peer trading arrangement.
However, if you choose to convert bitcoin to PayPal, exchange services often impose transaction limits. For example, Coinbase limits a single transaction to USD 10,000 and 25,000 per day; for EU customers, transaction limits are EUR 7,500 and 20,000.
These are the best options for how to exchange bitcoin for cash.