The word “Bitcoin” might have piqued your curiosity enough to start educating yourself on it, leading you to invest in it. No doubt that the monumental rise of Bitcoin’s value in recent times would’ve been the key factor in your decision to put your money into it. Its climb to a high of $64,829 in a short time beat many, if not most, of the traditional stocks.
Now that you’ve benefited from the increase, you’re looking for ways to spend it directly or liquidate it. Now you find that there are mechanisms associated with it that you have to know about, and it’s not as simple as it seemed.
Fortunately, there are service providers out there working to reduce the complexities that come with exchanging Bitcoin. You can approach the most suitable ones once you’ve better understood how to go about the process.
The most common options for exchanging Bitcoin are:
1. Third-Party Broker
A third-party broker is just a Bitcoin exchange with a different name. A broker allows you to deposit your Bitcoin into an account you’ve created with them. Once that deposit is confirmed, they will transfer the equivalent cash, also called fiat money, into the bank account of your choice.
Know that only a few such brokers accept fiat money as a deposit, meaning the exchange doesn’t happen the other way around. You must also make sure that your Bitcoin exchange doesn’t break any money laundering laws. One way to do this is to have the money transferred to the same bank account you used to buy the Bitcoins.
You’ll likely be making a fiat deposit to a broker exchange as a first-timer as well. Note that in the US, money transfers take 1-5 days to happen.
Abbreviated as P2P, this mode of Bitcoin exchange is the quicker of the two, and since verified platforms have entered the space to assist with the safe and easy transfers is the more popular option nowadays.
As the name suggests, it involves the transfer of Bitcoins between you and another person who’s willing to buy them for cash. The advantage of this mode of exchange is the flexibility it offers in the many ways you can receive your money.
The first way is a direct transfer to your bank account. It’s safe and convenient as you don’t even need to leave your house to do it. The caveat is that you should verify the credentials of the buyer via ID proof of some sort.
The second way is a cash deposit to your bank account. The person will physically deposit cash to it. As before, proof of ID and deposits are vital. Only transfer your Bitcoins after they’ve shown those.
The final way is cash transfer by meeting them in person. While this method is most guaranteed financially, since you will see the money in hand, it’s also the most dangerous as you’re prone to theft or harm. Make sure the exchange happens in a public space that you know.
3. NFT’s and Other Objects/Services
Non-Fungible Tokens or NFTs are essentially verified/certified virtual objects that you can collect. They can function as investments similar to tangible objects like artwork. Portals selling NFT’s eagerly accept cryptocurrencies like Bitcoins as payment.
The greater awareness of cryptocurrencies has led many vendors to accept Bitcoins as payment instead of fiat money for their goods/services. You could very well buy a cup of coffee with your stash of Bitcoins at your local coffee shop.
The world is warming up to a Bitcoin-based life. Exchanging Bitcoin in the most profitable and convenient method is sure to net you the best value return and allow you to step into a possible future that’s full of it.