Not long ago, it was really unusual to think of someone using Bitcoin to pay for groceries. And for a very good reason: you don’t want to pay with an asset that tomorrow could be worth twice.
Yet, the increasing number of cryptocurrency holders worldwide, as well as the introduction of so-called ‘stablecoins’ has quickly made place for digital currencies in the payments landscape.
Nowadays, businesses all over the world are realizing the benefits of accepting direct cryptocurrency payments for both in-store and online purchases.
In most cases, businesses don’t even need to ‘touch’ the digital assets, as payment processors would automatically exchange these coins and give them fiat money instead.
Bitcoin futures exchange Bakkt announced the development a consumer app that will allow holders to spend cryptocurrencies in popular retailers, such as Starbucks.
Despite the promising growth of cryptocurrency holders around the world, the number of outlets accepting crypto as a valid payment method remains quite limited.
So… how crypto holders can actually pay for goods and services everywhere?
One of the easiest ways to pay anywhere is, logically, to cash out cryptocurrency. In other words, convert Bitcoin into cash (euros, dollars or whatever fiat currency you prefer).
Surprisingly, the number of options to cash out Bitcoin and other cryptocurrencies remains quite limited, manipulated by a few players that corner holders with high fees and bad rates.
That said, let’s take a look at the available alternatives and try to figure out together what’s the best way to cash out Bitcoin and other assets this year.
#1 – Bitcoin ATM
Let’s forget about digital currencies for a minute. If you need cash… where do you go? Most likely, you head to the closest ATM and withdraw some fiat currency from your bank account.
With cryptocurrencies, it isn’t any different. Bitcoin ATMs (BTMs) allow cryptocurrency holders to turn Bitcoin into cash on the spot. Instead of withdrawing from a bank account, you would use a cryptocurrency wallet.
Generally, the process goes something like this: the BTM asks you to transfer your cryptocurrency to a specific wallet address within a fixed timeframe, say 30 minutes. Once the operation is confirmed, the BTM releases your cash.
Does it sound like a simple and fast process? Well, it’s really not. First of all, you need to find a Bitcoin ATM in your location. Now this might not be an issue if you live in a big city, but what about those living in the countryside? You get the idea.
Moreover, the process of sending your cryptocurrency to a specific wallet takes time. So, you would have to wait until your transaction is validated on the blockchain to finally withdraw cash. That can take from minutes to hours depending on your wallet service, blockchain, etc.
Apart from that, BTMs tend to only support the most common cryptocurrencies like Bitcoin, Ethereum and Bitcoin Cash. Those holding Ripple, USDC and other digital assets might face a hard time finding a BTM that supports these currencies.
But the most discouraging thing about Bitcoin ATMs is certainly the fees and rates. Usually, fees and rates are worse than those offered by online services. The reason is quite simple: if you’re already standing behind the BTM, you don’t have the time to spot better offers out there. With online services, you just open a new tab on your browser and find another solution.
#2 – Online service
So… if a BTM isn’t an option, the obvious choice is to look online. It only takes a Google search to find some available options. Among the first services to pop up, you would likely come across services advertised by cryptocurrency exchanges like Coinbase and Binance.
While these services might seem convenient, they don’t work for every cryptocurrency holder. For example, Coinbase only allows you to withdraw your funds to bank accounts in the US and certain European nations. The rest of the world cannot access this solution.
A similar story repeats with a number of popular cryptocurrency exchanges. Yet, there are third-party services like Localbitcoins, which literally connect buyers and sellers acting as escrow service to prevent fraud.
Now, again, you would have to find a buyer offering a decent rate to sell your cryptocurrency, and that can take some time. Not to mention the execution time… Typically, cash is sent to bank accounts and the standard processing time is 2 days.
#3 – Wallet service
If you’re thinking that cryptocurrency wallets are just meant to store your cryptocurrency, then you’re probably using the wrong one. Today, wallets offer a vast variety of services. And yes, that includes features to withdraw Bitcoin.
For instance, cryptocurrency wallet Luno allows customers to cash out cryptocurrency to bank accounts. Luno processes your withdrawal “automatically”, and then your bank takes as long as needed to release your funds. Leaving aside the geographical limitations of this type of service, there is another actor that sort of messes the entire process: banks.
Banks are heavily regulated financial institutions, and that means one thing: they don’t want to have anything to do with cryptocurrencies. That hard position costs time and money to thousands of cryptocurrency holders each day, who receive calls from the bank asking for “more details” or simply to inform them that those transactions are blocked for “security reasons”.
Companies like Crypterium have been able to come up with alternatives that offer a much smoother, less bureaucratic way to access your cryptocurrencies. Instead of sending funds to bank accounts, you can do it straight to a bank card. With only a few taps, a user can cash out Bitcoin or any other digital currency and get fiat money credited to a card’s balance in minutes.
#4 – Cryptocurrency cards
Without a doubt, cryptocurrency debit cards are one of the best ways to cash out Bitcoin and other crypto assets. The reason is quite obvious: these cards connect digital currencies to a well-known widely accepted payment and withdrawal method.
A cryptocurrency card is linked to a wallet, which is used to top it up. When a user tops up the crypto card, cryptocurrencies are being converted to fiat money. With that fiat balance, a user can spend at literally any shop that accepts payment cards, and withdraw in regular ATMs.
While there’s little to say against this cash out method, it’s worth pointing out the serious limitations regarding geographic availability. The Coinbase Card can only be used in the UK and a handful of European nations. A similar case applies to the Wirex Card and MCO Card.
To date, the only cryptocurrency card that’s been able to overcome geographical limitations is the Crypterium Card — currency present in over 150+ countries.