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Whether you are involved in the financial market or you own Bitcoin to make some interesting purchases, sooner or later, there will come a time when you want to withdraw Bitcoin from your bank account. And while most services offer peer-to-peer crypto transactions, sometimes you need a reliable service to exchange your assets for fiat money and be way more flexible.
This article will review some essential process factors - withdrawal taxes, transaction speed, liquidity, etc. Anyway, stay tuned to learn more.
Why Do People Withdraw Bitcoin to Bank Account?
People often swap Bitcoin to fiat currency for various reasons. The process, known as cashing out, involves transferring Bitcoin from a digital wallet to a bank account. The reasons for this transition from cryptocurrency to traditional banking systems vary and often reflect some personal financial strategies or are done for better convenience.
1. Realizing Profits
Investors often withdraw #Bitcoin to bank accounts to realize profits. When Bitcoin's value rises significantly, converting it to fiat currency like USD or EUR locks in the gains. Such a strategy is standard among traders who bought Bitcoin at a lower price and wish to capitalize on market highs. When you withdraw Bitcoin to a bank account, you transfer digital assets into tangible, spendable money.
2. Liquidity Need
Bitcoin, while valuable, is only sometimes quickly spendable for everyday transactions. If you convert Bitcoin to cash, it enhances liquidity and makes funds available for immediate use. People often need liquid assets for day-to-day running costs like bills, emergencies, or large purchases. Transferring Bitcoin to a bank account provides access to funds in a universally accepted form. It makes things easy, and sometimes ease is what you need.
3. Risk Management
Putting your assets in a bank account is a common risk management strategy. Crypto markets are notoriously volatile, and converting Bitcoin to fiat can protect against market downturns. This move is particularly prudent for those who cannot afford to ride out long periods of market instability. By transferring to a more stable currency, investors mitigate potential losses and secure their financial position, especially in uncertain economic times.
4. Regulatory Compliance
Regulatory compliance is another reason for withdrawing Bitcoin. With increasing governmental scrutiny of cryptocurrencies, converting Bitcoin to fiat and depositing it in a bank account can provide adherence to tax and legal regulations. The process involves declaring cryptocurrency assets, paying applicable taxes, legitimizing earnings, and avoiding legal complications. Such practice might save you from legal trouble, and we always want our readers to be alert to any potential hurdles regarding their Bitcoins.
5. Personal or Business Needs
Individuals and businesses might convert Bitcoin to cash for personal or operational needs. For ordinary people (the so-called Average Joe’s, albeit we don’t like how it sounds), this could include funding significant life events, educational expenses, or personal investments. Businesses might need to convert Bitcoin to pay for supplies, salaries, or other operational costs. Since many vendors and service providers do not accept Bitcoin, converting to fiat is often necessary to facilitate various personal and business transactions.
How do you withdraw Bitcoin to a bank account?
If you have never transferred crypto to a bank account, don’t worry - the process will take just a few minutes. Let’s see the quick steps.
Step 1: Create a Crypto Exchange Account
Your journey begins with setting up an account on a reputable cryptocurrency exchange. During registration, you'll need to provide some personal information and possibly go through a verification process to meet anti-money laundering requirements.
Step 2: Open a New Crypto Wallet
If you don’t already have one, open a new crypto wallet. This wallet is where you'll store your Bitcoin before transferring it to the exchange. Various wallets are available, including hardware wallets for heightened security and software wallets for ease of use.
Step 3: Send Bitcoin to Your Exchange Account
Once you create your crypto wallet, you can transfer your Bitcoin to your newly created exchange account. This step typically involves generating a deposit address from the exchange and then sending your Bitcoin to this address from your wallet.
Step 4: Swap Your Bitcoins for Fiat Currency
After your Bitcoin reaches your exchange account, you can convert it into fiat currency, such as USD or EUR. The conversion is essentially selling your Bitcoin on the exchange market. The exchange rate at the time of the transaction will determine how much fiat currency you receive.
Step 5: Withdraw Your Funds to Your Bank Account
The final step is to withdraw the fiat currency to your bank account. Link your bank account to your exchange account if you haven’t already, and initiate a withdrawal. The time it takes for the funds to reach your bank account can vary depending on the exchange and your bank's processing times.
Where can you withdraw Bitcoin to a bank account?
Withdrawing Bitcoin to a bank account is straightforward and achievable through several platforms and services. Each method offers different features and caters to various needs of the Bitcoin users.
Crypto Debit Cards
Crypto debit cards offer a clever way to use Bitcoin for regular expenses while enabling easy withdrawals to bank accounts. These cards, linked to a bank card account, automatically convert Bitcoin to fiat currency when you complete a new transaction.
Providers issue these cards and allow users to spend their Bitcoins as easily as traditional debit cards. Users can also withdraw fiat currency from their crypto debit card account to their bank account, which provides a quick transition from digital to conventional currency.
Crypto Exchanges
Crypto exchanges are another popular choice for crypto enthusiasts looking to convert Bitcoin for fiat currency and cash out their crypto to a bank account.
Renowned platforms like Coinbase, Binance, and Kraken are among the most famous names in the industry. On these platforms, users transfer their Bitcoin into the exchange's wallet, proceed to sell it at the market rates, and then withdraw the fiat currency they receive to a bank account linked to their exchange profile.
While the overall process is straightforward, it's crucial to be mindful of the transaction fees, withdrawal limits, and the time it takes to process transactions, as these factors can vary significantly between different exchanges.
Furthermore, users must undergo identity verification procedures to adhere to regulatory standards. These exchanges also accommodate diverse fiat currencies, making them accessible and convenient for a worldwide community of crypto users.
Broker Companies
Broker companies are tailored for users who prefer a more personalized service when converting Bitcoin to fiat currency. These companies, such as eToro and Robinhood, cater to beginners and experienced traders and develop well-optimized platforms for selling Bitcoin.
After selling, users can withdraw the fiat currency to their linked bank account. Broker companies often provide additional financial services, insights, and tools for a comprehensive trading experience.
They are ideal for users looking for a blend of trading and banking services but might need to be more convenient for everyday people who want to utilize crypto transactions.
Which Are the Best Crypto Service Providers?
If you want to exchange crypto assets, you may wonder which crypto providers to select for your needs. And that’s understandable. That’s why we’ll provide you with a list of the top three providers, in our opinion. All of them are worth your attention, and we believe you won’t make a mistake if you choose any of them.
1. PlasBit
PlasBit is our top choice in December 2023. The Polish authorities (UKNF) regulate the company and deliver top-notch services to the digital currency community.
It is a crypto bank with an authorized exchange permit, and it assures the security and dependability of the funds. But it goes way beyond it - the platform safeguards all client assets offline and is thoroughly insured, reducing the chances of theft in case of a breach. Only corporate assets are kept online for operational needs.
This Warsaw-based platform offers versatile payment options and is compatible with VISA and Mastercard. You also have client protection of up to $250,000, which is unique in the industry.
Your crypto assets are stored in cold storage, offering better funds protection. You can also issue a crypto debit card, which you can fund with your PlasBit crypto wallet, and the monthly spending limit reaches $50,000 per month and up to $5,000 in POS purchases per day.
Moreover, the platform simplifies electronic transfers. Customers can sell Bitcoin in conventional currencies like Euros or USD and carry out bank transfers effortlessly. The platform also supports a crypto debit card, which operates just like a typical debit card and lets you swap crypto into cash and vice versa in no time, which eliminates many issues with other providers.
Unlike many crypto exchanges, the Polish crypto bank has a TrustPilot score of 4.7/5, which exemplifies excellence in customer satisfaction.
Pros:
It is fully licensed in Europe, and the client protection limit is set at $250,000
You can issue a debit card and pay your bills with Bitcoin directly
Lots of features from a single hub
The interface is very user-friendly
Cons:
It doesn’t support that many tokens apart from Bitcoin.
2. Binance
Even if you enter the crypto scene for the first time, you might have already heard of Binance. The platform is known as the biggest crypto exchange by market cap and offers a platform primarily for those who use Bitcoin and other cryptocurrencies.
It is more oriented towards a more advanced user base. There are better options for casual shoppers and the general audience seeking simplicity in their #crypto transactions. However, for those familiar with the crypto industry, Binance provides a robust environment to manage and store your digital assets.
To start using Binance, you must create an account, a straightforward process that opens doors to a world of crypto-like trading experiences.
While it is more advanced in its features and functionalities, Binance excels in offering users the ability to sell Bitcoin for fiat currency efficiently.
That aids those who want to convert their Bitcoins into more widely accepted traditional currencies, like USD, GBP, and EUR. There is a dedicated Binance card that offers a lot of flexibility, and we liked how convenient it is.
Thanks to Binance's extensive market reach and high liquidity, users can confidently sell their Bitcoin without issues.
Pros:
Binance card adds a lot of flexibility for utility purposes
You can buy and sell 100s of cryptocurrencies
Low crypto exchange fees
It is a popular name in the whole industry.
Cons:
The interface is rather complex to comprehend if you are inexperienced.
3. Coinbase
Coinbase has firmly established itself as a reputable platform for holding crypto assets and purchasing Bitcoin. Its crypto-first approach is evident, positioning it as a go-to destination for enthusiasts and investors.
Much like Binance, Coinbase strongly emphasizes cryptocurrencies, but it also supports long-term holding for various tokens, making it a versatile choice for diverse crypto needs.
One of the standout features of Coinbase is its crypto wallet. The Coinbase wallet is among the most popular ones in the industry. You can quickly cash out your Bitcoin holdings and withdraw them to your bank account from the platform, so we highly rate the San Fransisco startup in that department.
However, it's essential to acknowledge some past friction between Coinbase and regulatory bodies like the SEC. These issues are noteworthy but haven’t detracted from the platform's overall reliability and standing in the crypto community.
Pros:
Dedicated crypto wallet
An easy-to-use mobile application
Many cryptos to buy and sell
Live phone support.
Cons:
High fees compared to other exchanges on the market.
How Much Time Does It Take to Cash Out Bitcoin?
Cashing out Bitcoin takes no time in terms of the crypto transaction itself. The instantaneous nature of digital currency transactions is one of the critical advantages of crypto assets in general. However, when it comes to the overall time it takes to convert Bitcoin into fiat currency and transfer it to a bank account, several other factors come into play.
Each crypto exchange has its own processing time for converting Bitcoin into fiat and executing a withdrawal. This variation depends on the exchange's operational protocols and efficiency.
Moreover, the processing time can be influenced by the banks involved in the transaction. Different banks have different speeds for clearing and settling funds, especially when dealing with international transactions.
Furthermore, the country in which the transaction is processed also matters. Different countries have different financial regulations, banking systems, and infrastructures, which can impact the speed of the transaction. Therefore, while the crypto transaction might be rapid, withdrawing your crypto can vary significantly based on these factors.
Crypto To Bank Account - What Fees Do I Owe?
When you withdraw crypto to a bank account, the fees involved can vary and are influenced by several factors. First of all, the fees depend on the crypto exchange you use. Each exchange has its fee structure, usually charging a transaction fee that is a fixed percentage of each deal, and the percentage can differ from one exchange to another, so it's vital to check the specific fees on the platform you're using.
In addition to exchange fees, your bank's policy regarding payments from providers that accept crypto transactions is another critical factor. Some banks may have additional charges for receiving funds from these sources. Understanding your bank's fee structure for such transactions is crucial to avoid surprises.
While most providers do not impose surcharges for converting Bitcoin to supported fiat currencies, it's worth noting that a significant majority of Bitcoin to fiat transactions are processed in USD. Therefore, consider potential conversion charges from USD to your local currency if you convert to another currency.
Last but certainly not least, Bitcoin owners should always be on the lookout for hidden taxes. Depending on your jurisdiction, there may be tax implications when converting Bitcoin to fiat, so it's essential to be aware of these potential costs.
Can I Withdraw Bitcoin from Every Country?
The ability to exchange Bitcoin from every country varies, mainly due to differing regulatory conditions and the availability of cryptocurrency exchange services. While Bitcoin is a decentralized digital currency accessible globally, the platforms that facilitate its exchange into fiat currency are subject to national laws and regulations.
You'll find a range of exchanges offering Bitcoin trading and conversion services in countries like Switzerland, Canada, Japan, South Korea, and some European countries like Estonia, Malta, and Poland, with supportive regulatory frameworks for cryptocurrencies.
These countries often have clear guidelines and policies governing cryptocurrency transactions, which makes it easier for residents to exchange Bitcoin for USD, EUR, CHF, CAD, and other currencies freely.
However, exchanging Bitcoin can be challenging in regions where cryptocurrency is heavily regulated or outright banned (like China, Egypt, and Saudi Arabia). Some countries have restrictions or prohibitions on cryptocurrency exchanges, limiting residents' ability to convert Bitcoin into local currency or trade it on regulated platforms.
Additionally, you should be aware that the availability and functionality of international cryptocurrency exchanges may vary from country to country. Some exchanges may not operate in certain regions due to regulatory constraints or may offer limited services.
What is The Difference Between a Bank Account and A Crypto Wallet?
The fundamental difference between a bank account and a crypto wallet lies in their nature and function. A bank account, managed by financial institutions, is designed for storing and transacting in fiat currencies like USD or EUR. It offers features like deposit and withdrawal of funds, direct debits, and wire transfers and is protected by regulatory safeguards.
On the contrary, a crypto wallet is an online tool for storing, sending, and receiving cryptocurrencies like Bitcoin. It operates on blockchain technology and provides high security through encryption and private keys. Unlike bank accounts, crypto wallets are not governed by traditional banking regulations and do not typically offer interest on holdings.
However, over the last few years, some modern financial service providers have begun offering hybrid solutions that combine both functionalities. These platforms allow users to manage fiat and crypto assets within a single account, providing the convenience of a bank account with the ability to transact in cryptocurrencies.
Why Use a Crypto Debit Card Instead of a Standard Card?
It's fair to ask why someone might choose a crypto debit card over a standard one. The primary appeal of crypto debit cards lies in their much better privacy features.
They offer better anonymity than traditional debit cards, which are directly linked to a personal bank account and, by extension, to the individual's identity. Crypto debit cards, on the other hand, allow transactions to be carried out with a greater degree of privacy.
Additionally, crypto debit cards provide the flexibility to spend digital currencies like Bitcoin directly without converting them into fiat currency first. These cards bridge the gap between the relatively new cryptocurrencies and the traditional financial ecosystem.
Final words
When the right time comes, you must know how to withdraw Bitcoin to a bank account. In the article, we already mentioned some of the things you need to check before you choose your next provider and some of the benefits of operating your Bitcoin just like any regular currency.
With the services of PlasBit, one of the best service providers, you no longer need separate entities for your crypto wallet and traditional bank accounts. Nowadays, you can convert your Bitcoin and other assets on the go and access cash any day of the week because you can cash out BTC via debit cards as if you’re withdrawing your hard-earned bucks.
Disclaimer: This article is for educational purposes and should not be taken as any form of financial advice. 36crypto will not be held responsible for any damage that might occur while you take action. Please do your research before taking any financial actions.
