How to convert your Bitcoin to FIAT?

Converting your cryptocurrencies into fiat currencies (FIAT) is an easy task today. Indeed, a multitude of platforms offer this service.

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What is Bitcoin?

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Bitcoin is a digital currency, also known as cryptocurrency. There is no physical bitcoin; instead, only digital data is stored on the blockchain. This means that it is a secure form of currency without any government control.
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Bitcoin's source code specifies that there will only be 21 million bitcoins produced. This limited supply is also what gives bitcoins their value. As the demand for bitcoins increases, it is possible to exchange one bitcoin for more money or services. In this way, Bitcoin has become a tradable store of value, much like gold.
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Why convert cryptocurrencies to FIAT?

The ultimate idea is for Bitcoin to replace traditional currencies. People are currently investing in Bitcoin because they see it as a commodity that will increase in value over time. If you own Bitcoin, you may want to hold on to it for this reason. However, since demand has recently increased, you could make a profit if you “sell” your Bitcoin now and transfer the same value to your bank account.
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In theory, you could one day use Bitcoin for all types of transactions. For now, there are still few businesses or individuals that accept Bitcoin payments. This is one reason why you may want to convert your Bitcoin to cash, in order to use the value of your Bitcoin to buy real things. It is important to note that Bitcoin is not the only cryptocurrency you can invest in; we invite you to check out our advice on the 12 best cryptocurrencies to buy in 2022. Now, let’s take a look at how to convert your cryptocurrencies (especially Bitcoin) into fiat currencies.

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How to transfer bitcoins to a bank account?
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Transferring bitcoins to a bank account is a process similar to exchanging currency at the airport when arriving in a new country. It’s essentially “selling” your bitcoins and “buying” the same value in dollars (or whatever currency you choose).

The “exchange rate” of this currency is not determined by the economic actions of a government or central bank. Instead, Bitcoin’s exchange rate is determined by demand. How many people want to buy bitcoins at any given time and what they are willing to offer determines how much you will get for your bitcoins.

Transferring bitcoins to a bank account is essentially a currency exchange. But since Bitcoin is not controlled by the government, the exchange process takes place privately and is not influenced by global economic structures.

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Considerations for Cashing Out Bitcoins

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Before you convert all your bitcoins to cash, consider the following pitfalls:
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Taxes – If you make a profit from selling your bitcoins, you will have to pay taxes on your gains. Keep this in mind when planning your tax year. Any reputable third-party broker will report the transactions for tax purposes.

Fees - Most methods of converting bitcoins to bank accounts involve exchange fees.

Speed - Third-party brokers may take a few days to transfer money to your bank account.

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Withdrawal methods

There are two main methods to convert bitcoins into cash and transfer them to a bank account. First, you can use a third-party exchange broker. These third parties (including Bitcoin ATMs and debit cards) will exchange your bitcoins for cash at a given rate. It’s easy and safe. You can also use a peer-to-peer transaction to sell your bitcoins. This is a faster and more anonymous method because you’re selling your bitcoins directly to another person.

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Third Party Broker Exchanges

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A third-party broker is another name for a cryptocurrency exchange. The process is similar to exchanging currencies at an airport in a foreign country. You deposit your bitcoin into the exchange. Once the exchange receives your bitcoin, you can request a withdrawal in the currency of your choice. The withdrawal will be deposited into your bank account.

Brokers are subject to anti-money laundering laws, so you will need to make a withdrawal to the same bank account that you used for the deposit. This method is simple, easy and secure, but it is not the fastest. The average time for the money to arrive in your account is 4 to 6 days, although this varies by country. The associated fees also depend on the location of your bank.

Bitcoin ATMs and Bitcoin debit cards work similarly to third-party brokers. In both cases, you create an account that allows you to sell bitcoins and withdraw physical cash. The downside is the higher transaction fees. Coinbase and Kraken are the most popular brokerage exchanges for buying and selling bitcoins.

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Peer-to-peer platforms

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For a faster and more anonymous method, you can use a peer-to-peer platform to sell bitcoins for cash. When you sell bitcoins to other people, you can choose the payment method you want buyers to use. This often allows for faster transactions with lower fees. You may also get a better exchange rate from an individual buyer than from a third-party broker.

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You can ask the buyer to deposit money into your bank account or send you a wire transfer (PayPal can also be used). Always ask for proof of identity and payment before handing over your bitcoins. Selling between individuals is safe if you know what you are doing. However, be wary of scammers. Using a peer-to-peer platform that allows you to lock your bitcoins until you confirm receipt of payment can be helpful.

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The most popular peer-to-peer platform is LocalBitcoins.

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How to Cash Out Bitcoins Using a Brokerage Exchange?

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Using a broker to trade your bitcoins is also simple if you follow these steps:

👉 Choose the third-party brokerage exchange you want to use. Coinbase and Kraken are popular options. It is also possible to do this on Lyzi.

👉 Register and complete the broker verification process.

👉 Deposit (or buy) bitcoins into your account.

👉 Cash out your bitcoins by depositing them into your bank account or PayPal account (applicable to certain services).

👉 Please keep in mind that withdrawal times can take anywhere from 4-6 days and transaction fees may apply.

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Convert your cryptocurrencies to Fiat currencies using a peer-to-peer exchange

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Most peer-to-peer platforms offer an escrow option that allows you to hold your bitcoins until you confirm that you have received payment.

Many peer-to-peer platforms allow you to create an advertisement for your bitcoins (although this method may incur additional fees). There is also a rating system, similar to eBay, that allows you to leave feedback on the buyer or seller. This allows you to choose a buyer safely.

Peer-to-peer platforms also allow you to stay anonymous. You can use a VPN to secure your connection and choose payment methods such as online currency or gift cards.

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