Cryptocurrency, an electronic currency that has caught the attention of investors and financial services firms alike, is a challenge. Using this currency the same way as typically using money isn’t easy. However, some new services will allow users to utilize bitcoin and other currencies in more conventional methods for their daily finances.
What is Cryptocurrency Banking?
The term”cryptocurrency banking” can be misinterpreted because the exchange companies and companies that provide services like these aren’t banks. Still, it typically refers to the methods by which consumers manage their balances in cryptocurrency. This type of banking typically allows customers to keep their money in a digital wallet or spend them as they would use traditional cash.
Benefits Of Cryptocurrency Banking
At present, an essential benefit of banking is cryptocurrency debit cards. They permit you to utilize your cryptocurrency balance just like other currencies to pay for everyday purchases or cash it out instead of storing it for investment.
Before debit cards became available, you could use your cryptocurrency only with merchants that accepted the currency directly or trade it to exchange dollars. Nowadays, financial technology companies have partnered with chartered banks or debit card issuers to offer the cards, using their partners’ system of regulation and logistical framework to sell your cryptocurrency in the background and convert it into dollars, making it possible for merchants to accept the currency. That means your digital money is.
Methods to Convert Cryptocurrencies to Cash
Through exchanges for cryptocurrency
The first way to convert cryptocurrency to cash is through a crypto exchange or broker. This is similar to the exchange process at airports of an international country.
The cryptocurrency is deposited into crypto exchanges like WazirX, CoinDCX, CoinSwitch Kuber, and KuCoin crypto exchange. You can request a withdrawal using the currency you prefer. The withdrawal will be credited to your account at the bank. Let’s look at this using Bitcoin to illustrate a cryptocurrency you wish to transform into cash.
Through peer-to-peer networks
To speed up and make a secure withdrawal, utilize a peer-to-peer platform to exchange Bitcoin for cash. The most well-known peer-to-peer network is LocalBitcoins.
Register on a peer-to-peer exchange platform and select where you want to buy. Use the marketplace to locate buyers. Many peer-to-peer platforms have an option for escrow where Bitcoins will not be transferred to the purchaser until you confirm that you received the payment.
When using the peer-to-peer selling method, it’s crucial to alert fraudsters. It is also advised to utilize a peer-to-peer platform that allows you to keep your Bitcoins secure until you confirm that the money has come from the purchaser.
Face to Face
The cryptocurrency can be sold on the spot through what’s known as “bitcoin markets.” This is a place for the public where crypto-currency enthusiasts gather to trade digital currency against hard cash. This can be the most lucrative way to sell your product because you can offer high prices and charge extra travel costs and the convenience of a personal meeting. In general, you can ask for a 30-35% increase over the market price, but the risk of this approach is substantial. However, if the necessary security measures are in place and a plan for every possible outcome is implemented, you can reduce the risk significantly. Additionally, when you receive payment by cash, the purchaser cannot initiate charging back.
With a broker
It’s similar to the crypto exchange system used at airports. After you have deposited your digital currency in exchange and request to withdraw, your broker transfers the funds into your account at the bank.
But, because there are restrictions on money laundering for brokers, you will need to be able to withdraw your money using the bank account you made the deposit.
When to Convert Your Crypto to Cash?
The final decision on when you should convert your crypto into cash will depend on your particular situation. If you need money but don’t wish to use funds from assets and other retirement accounts, it’s logical for you to trade your currency instead. In addition, if you’re worried or stressed about having a cryptocurrency account for any reason, be it the volatility or a different reason, it’s logical to convert your cryptocurrency to cash for health reasons.
If you’re planning to convert your crypto into cash but are waiting for the perfect time, then the cost of the transaction and the value of your cryptocurrency are both critical. Because the crypto market is unstable, it’s difficult to predict the right moment, and frequently checking the BTC price of any other cryptocurrency can drop the risk of trading at a “bad time”, and determine the “right time” to sell if you’ve achieved your goals for investing However it could be the perfect time to sell.
