Since its underwhelming start in 2009, Bitcoin has only seen itself rise into a global phenomenon. What started out as having the value of one cent pet bitcoin is now often peaked at $60,000 per bitcoin. Bitcoin has overwhelmingly surpassed all forms of stocks and assets in the market and has only churned out profits for those who had faith in it from the start. Many analysts agree that Bitcoin is the largest and most profitable asset of this decade.
With an ever-increasing number of users, there are more and more people who have realized the value of investing in Bitcoin. Those who realized it earlier in 2009-10 where Bitcoin was available at bafflingly low prices have found themselves to be millionaires now. Even when the pandemic hit, Bitcoin only increased in value as the global economy fell and the stock market crashed. If you too want to invest in Bitcoin to insure your money from an economical crisis, then we strongly suggest you visit this site to do so.
However, if you already have invested copious amounts of money in Bitcoin on a much earlier date then we heartily congratulate you on investing wisely. But now the real question is, how would you take it out? When cashing out bitcoins, that is exchanging bitcoins with your currency and transferring it to your bank account, it is crucial you know that while smaller transactions are relatively easy to do, it is the bigger transactions that are riddled with various problems.
If you too are confused about how you will cash out the large amounts of money in your bitcoins, then you don’t have to worry anymore. Because in this article, we’ll tell you exactly what kind of problems you might face while transforming your digital currency into physical currency, how you can counter them, and choosing an exchange method as per your preference.
Factors to consider before cashing out large amounts of bitcoins to cash
Cashing out larger transactions of bitcoins is not as easy as cashing out small bitcoin transactions. Several limitations and problems line the way of transacting bitcoin such as –
Limit on withdrawals at exchanges
While many exchanges are more than willing to let you withdraw cash to a certain limit per day, the problem arises when you want to withdraw more cash but are bound by the withdrawal limits. These withdrawal limits can be anything from $2000 to $15,000 depending on which exchange platform you use. However, this can be easily bypassed by increasing your account’s level higher to a premium one which also raises the amount of money you can withdraw.
If you suddenly exchange a lot of bitcoins to cash to your bank account – it’s bound to get your bank wary and suspicious, especially if your account doesn’t regularly receive such amounts. In extreme cases, this can even lead to them freezing your bank account until you can finally assure them that the money is entirely earned through legal earnings.
We recommend you check if your bank account accepts storing earnings from cryptocurrency, as some don’t, and if they do, inform them beforehand about your large exchange transaction. If you ensure transparency between you and your bank, you have nothing to worry about.
Cryptocurrency itself isn’t applicable to any form of tax or regulation, since it’s not regulated by any country or a central authority like other currencies. However, when you convert large amounts of your cryptocurrency, i.e. your bitcoins, to cash, you must understand that this exchanged cash is liable to taxes. Since your money is in the form of your country’s currency, their rules and taxes apply to it.
That’s why we recommend seeing a tax lawyer or consultant, especially one who has knowledge of cryptocurrency taxes and asking them the wisest thing to do. They’ll guide you and in the process also save you quite a lot of money that otherwise you would have had to pay to the government.
Ways to convert bitcoins into cash
Bitcoin, unfortunately, doesn’t have one universal single method of transferring your bitcoins to cash. Instead, it has several methods, each with its flaws and advantages.
Many exchange platforms exchange your bitcoins into cash in the quickest and most reliable way possible. However, they also have limiting withdrawal limits that only allow small bitcoin transactions until you upgrade your account. Exchange platforms also charge a fee based on the amount of money you withdraw that you can check before the transaction is initiated. Exchanges aren’t too reliable to keep your transactions anonymous either because exchanges often demand personal information before letting you exchange.
OTC bitcoin brokers
A method that users tend to prefer more than exchange platforms is over-the-counter (OTC) bitcoin brokers. OTC bitcoin brokers act as intermediaries between you and another client to initiate a deal that gives your bitcoin to them in exchange for their cash. The exchange currency rate is decided beforehand so that you don’t get unwelcome surprises in the middle of your transaction.
The process is simple too – you give the transaction information to the OTC broker, tell them your bitcoin selling needs and requirements and the rate, which is then matched with the needs of a buyer who wants that bitcoin. There are many secure and reliable websites that act as OTC bitcoin brokers where you can be assured your money is in secure hands.
Peer-to-Peer (P2P) exchange
This is the riskiest and the least secure method of converting your bitcoins into cash. Within a p2p bitcoin exchange marketplace, two individuals contact each other to exchange bitcoin and cash directly without any intermediaries in between. While this may sound a very alluring deal, it’s important to know that these platforms are exactly where most of the bitcoin scams occur. One wrong move and you just sent millions of worth of bitcoins to an anonymous scammer.
If you do end up deciding to exchange your bitcoin into cash at a P2P platform, ensure that you thoroughly check the individual’s past history and background. It’d also be much better if you can find someone that you personally know and trust, or someone who is referred by your lawyer or a reputed cryptocurrency trader.
Transferring large amounts of bitcoin to cash can be a very tricky process and there are many factors that are expected of you to consider thoughtfully. We hope this article helped you in doing just that, and if it did, please consider following our website for regular updates as it will help us out immensely.