In today’s time, cryptocurrency has gained huge popularity. More and more people are now interested in investing in crypto. However, many newbie investors have one common question: how to cash out large amounts of Bitcoin?
However, cashing out large amounts of Bitcoin is not as simple as buying Bitcoin. As when you are cashing out a large number of funds, it will attract tax-related issues and might come under the radar of government agencies.
So what’s the safest and secure way to cash out large amounts of Bitcoins? Well, this is what I am going to discuss in this article.
What You Need to Consider When Cashing Out Bitcoins?
The process is extremely easy whenever it comes to cashing out a small number of Bitcoins. All you have to do is transfer some of your funds to crypto exchange and sell it for fiat currency and withdraw the cash.
But what if you have a few hundred Bitcoins? Well, cashing it out won’t be as easy as it might seem because most crypto exchanges have a withdrawal limit.
That’s why, before you cash out your Bitcoin, here are a few things that you should take into consideration:
Crypto Exchange Withdrawal Limits
As long as you are cashing out a few thousand dollars, you should not have any issues related to the crypto exchange withdrawal limit. Most of the crypto exchanges have a huge withdrawal limit which should not create any issues.
But before you choose any of the crypto exchanges, you should check their withdrawal limits. Most exchanges have a daily withdrawal limit that can be anywhere between a few thousand dollars to a hundred thousand dollars.
Also, some of the exchanges offer you the feature to upgrade your user account to increase your withdrawal limit. For instance, you can complete your KYC to increase the withdrawal limit.
Like as per The Money Mongers, Phemex a popular crypto derivatives exchange allows upto 2 BTC withdrawal each day.
In addition to that, you can also use multiple exchanges to cash out a large number of Bitcoins. Or you can take out small amounts of funds each day.
Without any doubt, tax is one of the complicated subjects to deal with. Although, cryptocurrencies are not subject to any government’s law or come under tax-related bills.
But these laws and bills are only applicable as long as you are trading or mining crypto on crypto exchanges.
But the moment you decide to convert your Bitcoins for real-world money such as USD comes under legal jurisdiction.
So based on the country you are cashing your funds, you will need to deal with laws and regulations that govern money transfer and taxes.
Now you must be wondering how to avoid taxes and still withdraw all your Bitcoin funds. Well I would recommend you not to avoid any taxes. If you cash out your funds in an illegal way, you might face legal issues related to money laundering.
Hence, the best you can do is have a talk with an accountant or lawyer who is aware of cryptocurrency taxes. See what they have to say, and based on their advice, you should proceed ahead.
Another thing that you have to deal with is bank policies. Although, in today’s time, most banks are open about cryptocurrency, and they are completely fine with any kind of crypto transfer.
But there are banks that are completely against crypto transactions. As a result, they might pose difficulties or freeze your account.
So if you are going to cash out bitcoins for the first time, it is advisable to check your bank’s money transfer policies in detail. If they have any rules or regulations about cryptocurrency.
If you cannot find any of such details in their policies, you might want to talk to customer support for further help.
Also, if you choose to ignore the policies and go ahead with a large cash deposit to your account, then the bank might freeze your account.
As it is a pretty common thing for banks to freeze an account when it suddenly receives large amounts of money.
Break Large Funds into Small Ones
Even if you can deal with the above issues, it would still be better to break large funds into small ones. This is because you should avoid completing the transaction in one go.
Instead, you can break the total amount of funds into small ones for security reasons.
So even if something goes wrong, you would only lose a small number of funds you own. Hence, it would be a good idea to withdraw your funds in small portions.
Also, many experts advise you to use different payment methods to cash out Bitcoins. So if there is any problem with the transfer, you can lower the overall risk.
In addition to that, you can also use your Bitcoins to purchase anything you like. Maybe, any phone or laptop that you would like to own. This way, you would be spending your Bitcoins and cashing it out in an alternative way.
How to Cash Out Large Amounts of Bitcoin?
One of the best ways to cash out large Bitcoin funds is to convert them into fiat currency. You can do it via a crypto exchange.
All you have to do is create an account on a crypto exchange platform that is operational in your region. Then you have to complete the KYC process and connect your bank account to the exchange.
After that, simply transfer your funds to the exchange’s wallet and then you can sell it for your preferred fiat currency and drop a withdrawal request of your funds.
However, when you exchange Bitcoins on any exchange, you will need to pay certain fees. So before you choose any crypto exchange platform, do check their fees.
Although, you may not want to pay any fee. But it is one of the best yet secure ways to cash out Bitcoins in a large amount.
P2P or peer to peer exchanges are also one of the easiest ways to cash out your crypto assets. P2P exchanges are basically an online marketplace where you can trade crypto assets directly with other users.
In these exchanges, a buyer or seller can post an ad about selling their funds or being interested in buying. So in the case of selling your Bitcoins, you can connect with the buyer directly, and the exchange will help you deal with the whole process.
Alternatively, you can also post an ad about selling your Bitcoins. Like, you have to mention the number of funds you are selling, your desired price, and the preferred bank method.
Now interested buyers can find your listings and complete the process provided by the P2P exchange platform.
And once you receive your funds, you have to confirm the transactions, and your crypto funds will get moved from your account to the buyer’s account.
While this process is extremely easy and straightforward, it can be a risky method for cashing out a large amount of Bitcoin.
Bitcoin ATMs are another way to cash out Bitcoins. Bitcoins ATMs are the same as the traditional ATMs. However, instead of withdrawing cash from your Bank account, you are using the ATM to sell your Bitcoins and get cash in return.
Bitcoin ATMs are extremely easy to use. All you have to do is visit the nearest Bitcoin ATM and place a withdrawal request on it.
Then it will give you a QR code that you have to scan and transfer your funds to the address. After that, use the machine to sell your funds and withdraw cash.
The good part about Bitcoin ATMs is that they are located all over the world, and you can find their location pretty easily.
But there are certain drawbacks. For instance, they usually charge a higher transaction fee than other withdrawal methods.
Along with that, they do have a withdrawal limit. So if you are planning to withdraw a huge sum of money, that would not be possible.
Also, some of the ATMs require you to verify your identity before you sell your funds. So if you are looking for an anonymous way to cash out your crypto, Bitcoin ATMs might not be the best choice.
Bitcoin OTC Broker
The next thing that you can use is the Bitcoin OTC Broker. OTC stands for Over The Counter, and it is an exchange service that connects buyers and sellers directly by matching the desired conditions specified by the clients.
This is one of the most preferred options when it comes to cashing out large crypto funds. The best part about it is that OTC will not publicize the details of a sale. As a result, the deal does not affect the market.
Moreover, the deal only happens directly between two parties. As a result, the withdrawal limit is not really an issue.
Lastly, you can consider direct trading. In this method, you have to find someone interested in buying Bitcoin. So you can sell your funds directly to them.
Finding such buyers is a pretty easy thing. As many people trade this way. Plus, it helps you to bypass exchange fees and helps you to protect your identity.
You can take help from Facebook or telegram groups to find such buyers. All you have to do is post your query in such groups and deal with someone who lives nearby.
But it can also be a risky thing to do. Since you are dealing with strangers. So make sure to take proper security measures before proceeding ahead.