How can I withdraw cryptocurrencies?

Cryptocurrencies are booming! More and more people are investing in Bitcoin and Co. And by no means without a reason: in addition to the high degree of privacy that the digital coins offer their owners, the main thing for buyers is to achieve value growth. Are you wondering how it works? Simply explained: In order to benefit financially from buying crypto, sooner or later you will have to sell your cryptocurrencies again and exchange them for a real money currency such as EUR or USD!


Information

Did you know that: 1 bitcoin was worth less than 1 euro in 2009? In fact, the value of BTC at that time was a whopping EUR 0.08. 12 years later, in early 2021, Bitcoin passed the 50,000 euro mark. In fact, several investors who bet on the appreciation have become millionaires thanks to cryptocurrency.


In contrast to Bitcoin, some of the alternative cryptocurrencies, so-called Alt-Coins (Ethereum, Litecoin, Dogecoin, ...) are still in their infancy - but the prices of many of them are also rising steadily! Crypto enthusiasts are hoping for a similar increase in value as Bitcoin.

It is therefore all the more important that you know how to turn your crypto assets back into “real” money! But how does it actually work?

In this article, we will explain to you in detail what different options you have to convert your cryptocurrencies into your preferred fiat currency as simply and easily as possible! Here we go!

What options do I have to cash out my cryptos in fiat currencies?

The most important things first: Traditional banks do not yet offer the exchange of Bitcoin.

However, there are some alternative ways to quickly convert cryptocurrencies into real money currencies.

Each method has its pros and cons in terms of speed, privacy, and fees involved.

The four most common ways to withdraw cryptocurrencies are:

  • Crypto exchanges (Bitpanda, Binance, Coinbase, Kucoin, …)
  • Crypto debit card
  • Peer-to-peer file sharing sites
  • Crypto ATMs

We will now introduce you to all four methods individually and in detail:

Cryptocurrency exchanges

This is the most common method of converting crypto funds into fiat currencies. The principle is very simple and you may remember it from your last vacation abroad. Because crypto exchanges are basically comparable to traditional exchange offices. The online marketplaces are primarily there to convert your cryptocurrencies into traditional currencies such as EUR or USD.

All crypto exchanges have so-called crypto converter functions. These show you how much real money you will receive in return after selling your cryptocurrencies. So there can be no nasty surprises.

Ethereum Icon
Ethereum
Dogecoin Icon
Dogecoin
Bitcoin Cash Icon
Bitcoin Cash

Established exchanges like Binance, Coinbase or Bitpanda also attach great importance to Ease of use – ideal if you want to exchange your cryptocurrencies for real money for the first time.

Using the Austrian exchange Bitpanda as an example, we will now explain to you how the trade and payout process on crypto exchanges usually works:

  • First of all you have to sell your cryptocurrencies. This is how you receive fiat funds such as EUR or USD, which you can then withdraw to your bank account: 
  1. Click on Trade in your dashboard
  2. Click Sell
  3. Choose the appropriate cryptocurrency you want to sell
  4. Select your Fiat Wallet to which you want to make the withdrawal
  5. Set the amount you want to sell
  6. In the last step you will see a summary of your sale. After you have waived your right of withdrawal, click on Sell now and the corresponding amount will be credited to your Fiat wallet

You have now successfully converted your cryptocurrency into fiat money - but the amount is still in your wallet on the crypto exchange. In the next step, we will show you how to get the money into your bank account:

  1. Click on Portfolio and Currencies in your dashboard.
  2. Now select your desired Fiat wallet from which you want to withdraw money and click on Withdraw.
  3. Choose a Payout Account. If you haven't already done so, you need to create a new payout account now.
  4. Then enter the desired amount that you would like to withdraw and click on To the summary. Please note that the minimum amount of 25 euros applies to all deposits and withdrawals.
  5. Check carefully that everything is correct. If so, click Confirm.
  6. You will then receive a confirmation email. In this you now click on the button Confirm transaction.
  7. You will then be redirected to a Bitpanda confirmation page.

Information

By the way: At Bitpanda, withdrawals with SEPA transfers are free of charge. However, withdrawals via Skrill or Neteller are subject to a fee of 1.50 euros + 2% of the amount.


This brings us to an important point. Crypto exchanges often charge so-called trading fees. These come into play when you convert your cryptos to fiat currency prior to the withdrawal process. Although these fees are hardly significant for a smaller amount, painful losses can occur when larger sums are paid out. It is therefore advisable to compare between the individual exchanges.

Another potential downside is that it may take several business days for your fiat currencies to appear in your bank account once the transaction is complete.

In addition, in times of price fluctuations - i.e. exactly when you want to have your cryptos paid out quickly - some online exchanges can experience failures because the increased demand from users puts an additional strain on the infrastructure of the trading platforms.

The most important advantages and disadvantages of crypto exchanges at a glance:

AdvantagesDisadvantages
Easy and safeTrading premiums
Beginner friendlyPossibly longer processing time
Large selection of trusted providersFailures possible

Crypto debit card

A crypto debit card is easily the fastest way to convert your cryptocurrencies into fiat. These cards are now offered by many crypto exchanges. For example, Binance, Nexo or Bitpanda - to name just a few - already have their own debit cards in their repertoire. Visually, these cards differ just as little from conventional credit or debit cards as in their application. With a crypto debit card you can make online payments, pay for your groceries in the supermarket or withdraw money from ATMs.


Warning Sign

Caution: In general, it is important to keep an eye on tax obligations when withdrawing cryptocurrency. Especially with credit cards, every transaction represents a taxable event in many countries. Accordingly, it may become difficult to pay this off correctly in the future. Therefore, think about a strategy beforehand, how you want to deal with this and inform yourself about the laws in your country.


The small but subtle difference: The crypto debit card is linked to your account with the respective crypto exchange - so you pay directly from your crypto wallet.

If you are now in possession of a crypto debit card and you want to have your cryptocurrencies paid out as quickly as possible, you can do this conveniently via an ATM!

But beware! Crypto debit card providers charge a fee with every transaction process. Even if an exchange boasts that it allows fee-free money transfers with its debit card - you cannot escape the mandatory trading premiums.

The maximum total amount of transactions is also limited. With the Bitpanda Visa Card, it amounts to a daily limit of 350 euros.

The most important advantages and disadvantages of a crypto debit card at a glance:

AdvantagesDisadvantages
Fast and convenientTrading premiums
Direct cash withdrawal possibleDaily limit

Peer-to-peer file sharing sites

Peer-to-peer exchanges are a special form of crypto exchanges. As the name peer-to-peer suggests, users trade directly with each other on such exchanges - in contrast to centralized exchanges such as Binance, Coinbase or Bitpanda. There, the provider acts as an intermediary and charges accordingly for its services.

Peer-to-peer exchanges eliminate this middleman. This means that trading is cheaper - even if security suffers as a result.

So peer-to-peer exchanges don't automatically settle a trade when they find matching buy and sell orders. Instead, they create a connection between a buyer and a seller. Both then have the opportunity to trade themselves via the peer-to-peer exchange.

These exchanges are decentralized and many often do not require identity verification, thus maintaining user anonymity. However, many peer-to-peer exchanges like LocalBitcoins and Paxful have started to adopt some KYC (Know Your Customer) protocols to mitigate the risk at least a bit.

While peer-to-peer exchanges obviously give you more room to maneuver, you also need to be aware of the risks. Due to the lack of a middleman, there is always the possibility of dealing with dishonest parties.   

The most important advantages and disadvantages of peer-to-peer file sharing at a glance:

AdvantagesDisadvantages
CheapStill relatively new on the market
High transparencyLow trading volume
AnonymityHas some risk

Metal Pay

This app acts as a crypto exchange, but it has focused on trading on your smartphone. With this mobile app, you can exchange your cryptocurrency for fiat currency. In order to use the app successfully, you need to complete a KYC verification. After that, you enter your bank details and can start transferring funds.

Bitcoin ATM

In Austria and Switzerland there are already hundreds of Bitcoin ATMs from different providers. At the machines it is not only possible to buy cryptocurrencies - some even allow cryptos to be converted into fiat. A Bitcoin ATM works similar to a traditional ATM. In addition, a QR code and other security features such as text messages for authentication ensure smooth and secure transactions.

In order to sell your cryptos at an appropriate machine, you must enter the Bitcoin amount to be sold on the machine's touchpad and send it to the address shown on the screen. After completing the transaction, you will be paid real money, either in cash, directly at the Bitcoin ATM, but usually as a transfer to a bank account or credit card.

However, the selling price offered is usually significantly lower than at crypto exchanges or other online marketplaces. As practice shows, the prices for bitcoin machines are about 5 to 10 percent below the average.

Also, there are usually withdrawal limits - logical considering the amount of cash the machines can physically store is limited.

Die wichtigsten Vor- und Nachteile von Bitcoin-Automaten auf einen Blick:

AdvantagesDisadvantages
SafeLow sale price
FastSell limit

Available cryptocurrency exchanges

Below you can find some more popular cryptocurrency exchanges that you can use to exchange.

bitpanda logo
binance logo
coinbase logo

Coinbase

Coinbase is arguably one of the most popular cryptocurrency exchanges available on the market. The company makes it easy to trade cryptocurrencies, whether you want to buy or sell. You can trade various cryptocurrencies like Bitcoin, Ethereum and many more. Coinbase allows you to link your bank account to your account at the exchange. This makes it easy to deposit money from your bank to your Coinbase account or vice versa. The transaction usually takes place within a few days. Coinbase has a mobile app to simplify the entire process on your mobile devices. Coinbase is also currently the only provider that allows you to link your PayPal account and transfer funds directly to it.

Bitstamp

This company is similar to Coinbase, but it does not allow you to link your bank account, which makes it a bit more cumbersome to use. However, the basic functions like buying and selling cryptocurrencies are of course given. When comparing Bitstamp with Coinbase, the user interface also stands out negatively. The handling is a bit more difficult and we did not find our way around easily. However, the provider convinces with lower fees in return. So, if you take a few hurdles, you will end up with a fuller wallet.

Bittrex

Bittrex is an American crypto exchange that was founded back in 2015. As with the other providers, buying and selling cryptocurrencies is part of the core business. Even though the user interface leaves something to be desired compared to larger portals, it is a solid provider. Fair fees with all necessary security standards convinced us in the test.

Kraken

Kraken is known in the scene for a huge selection of cryptocurrencies. The provider lists most of the new projects and is thus especially popular among risk-taking experts who are looking for the next bitcoin. The fees as well as the handling are user-friendly throughout. This makes the provider a good choice.

How to choose the best cryptocurrency exchange

Although there are many cryptocurrency exchanges on the market, they work in different ways and offer certain advantages and disadvantages. You should consider some factors before choosing an exchange.

Withdrawal fees

Fees

Fees are charged by exchanges for almost all transactions. This is of course legitimate, as the providers finance themselves through this. At this point, however, you should definitely consider a comparison. Some exchanges have a fixed withdrawal fee, which is a flat rate for each of these transactions. For others, the fees increase depending on the amount of money and are thus fixed as a percentage. Deciding which provider is the best fit for you is very personal. Depending on your financial situation and investment plan in cryptocurrencies, different providers can bring benefits.

Withdrawal limits

Performance

Withdrawal limits come in many forms. Some exchanges allow you to withdraw money daily. On others, you can only withdraw money once you reach a certain amount. These limits vary depending on the exchange. Again, you need to decide which crypto exchange best suits your investment plans.

Simplicity of use

Wheels

Almost all providers appear in the form of a website. In addition, larger crypto exchanges offer a mobile app that can be used to conduct transactions on the go. The user interfaces differ greatly in some cases. If ease of use is important to you, you should go for large providers like Binance or Bitpanda. These meet all the requirements for a customer-oriented interface. However, this is unfortunately also reflected in somewhat higher fees.

Customer service support

Support

Customer service is a more important factor when looking for a crypto exchange provider. After all, your assets are at stake. Since cryptocurrency exchanges make newbies feel uncomfortable, we believe that helpful support is an important factor when choosing a provider.

Can I convert bitcoin to fiat directly on PayPal?

In November 2020, online payment provider PayPal introduced features to buy and sell cryptocurrencies. PayPal allows its users to buy Bitcoin, Ethereum, Bitcoin Cash and Litecoin and hold them in the PayPal digital wallet.

However, PayPal is restricting its users to holding cryptocurrencies on its platform for now. Unfortunately, as things stand at present, you can neither transfer cryptocurrencies from your PayPal wallet (except to make purchases with PayPal), nor can you transfer them to other accounts inside or outside of PayPal.

Conclusion

The exchange of cryptocurrencies into fiat currencies is simple in gerneal. The most common way is to make a withdrawal at a crypto exchange. However, it is important to invest some time in research beforehand. You should be clear about what kind of investor you are and what characteristics a crypto exchange should bring with it.

Withdrawals with credit cards look tempting at first glance, but can cause difficulties due to possible tax obligations. So be careful and ask about the legal regulations in your country.

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