How To Cash Out Large Amounts Of Bitcoin?

How do you cash out a Bitcoin?

The two most common ways of cashing out Bitcoin is by using a third-party broker exchange and a peer to peer platform.

Cashing out Bitcoin via a third-party broker exchange is quite a simple and straightforward process. All you need to do is deposit your bitcoin into the third-party broker exchange and once this has been done, you can request for a withdrawal in fiat money. The withdrawal can be done via a wire transfer. However, this method will take up to a maximum of five days for you to receive the money.

The Peer to peer platform is the next best option to cash out Bitcoin quite easily. The Peer to peer platform involves finding a local buyer for your bitcoins who will be willing to exchange bitcoins in return for cash. You can ask the buyer for a cash deposit or a bank transfer from the other party and once the amounts have been received you can transfer your bitcoins to them. This is a relatively faster method than using a broker exchange. However, you need to beware of tricksters and scammers while opting in for this approach.

How do you cash out Bitcoin without paying taxes?

As far as taxation is concerned, Bitcoins are taxed similar to capital assets and only gain on Bitcoin transfers are taxable. However, you do not need to sell Bitcoins in a literal sense to make a gain and be liable for tax. Anything that you pay using Bitcoin which has been accumulated and risen in value overtime will be considered a deemed sale and hence the gain will remain liable to capital gains tax.

For US Citizens as far as they remain a citizen of the USA, they will be held liable for the IRS tax law and will be liable to any Bitcoins gains too. If you want to cash out Bitcoin without paying taxes, then you will have to renounce your US citizenship. But here’s the catch, you can alternatively consider moving to Puerto Rico which is part of the USA but is not subject to the federal tax laws. In this case, you can consider fulfilling the requirements to be qualified for a zero percent tax rate on short- and long-term capital gains. This way you can cash out Bitcoin without paying any taxes.

Can I sell all my bitcoin at once?

There is no restriction on the number or value of Bitcoins that can be sold or traded. You are free to sell all your bitcoins at once. However, certain broker exchanges do have restrictions about the number of transactions and value traded in one day. This amount and limits may vary from one exchange to another. Therefore, if you are looking to sell a lump sum of bitcoins at once you may need to consider if your exchange allows for it.

How to Cash Out Large Amounts of Bitcoin Quickly?

There are quite a few ways to cash out large amounts of Bitcoin quickly and these include using a broker exchange, trading with Bitcoin OTC Broker and a Peer-to-Peer platform.

Trading via a recognized broker exchange is the most common method to cash out large amounts of Bitcoin. In this method, you can exchange your Bitcoins for fiat money. However, this method does have its limitations in terms of variations in BTC to USD rates, varying cash withdrawal procedures and lack of fiat adequate for large Bitcoin cash outs.

Trading via a Bitcoin OTC Broker is best suited for large cash outs and for corporate investors as it connects buyers and sellers of cryptocurrency directly. Also, the details of these sales will not be publicized hence no impact on the Bitcoin market. Also, greater anonymity, privacy and lack of restrictions such as withdrawal limits are a few reasons what make this option better than trading via a broker exchange.

A peer to peer platform involves the exchange of bitcoins in a manner similar to the Bitcoin OTC Brokerage option minus the broker. This option will serve well if you have a ready buyer that you can trust well. Otherwise, it is not the safest and recommended approach to cashing out large amounts of Bitcoins.

5 Factors to Consider Before Cashing Out Large Amounts of Bitcoin

How Much Bitcoin Can You Cash Out at Once?

There is no hard and fast rule to the amount of Bitcoins you can cash out in one go but of course, if you are using a broker exchange there many be withdrawal limits that you may have to abide by which we will discuss below. However, if you opt in to cash out your bitcoins via an OTC Bitcoin broker or a peer to peer exchange then the limits will not be a cause of concern.

Don’t Trigger Suspicious Activity Reports by Banks by Moving Large Amount at Once

A sudden inflow of a large amount of money resulting from a bitcoin cash out may trigger a red flag for your bank account with regard to possible money laundering activities. The best way to overcome this situation, is to keep your bankers informed of the transaction beforehand and convince them that the money is received from a legal and valid sale of cryptocurrency and not via illegal means. Some banks may give you the signal to go ahead but some banks do not accept cryptocurrency transactions and associated monies. In that event, you might have to consider switching your bank to one that accepts money from cryptocurrency dealings.

Do You Have Enough Cash to Pay Taxes on Bitcoin Profit

Investing and earning from Bitcoin is great but before cashing out large amounts of Bitcoin you need to ensure that you have enough cash to pay taxes on Bitcoin Profit. Bitcoin gains are treated as capital gains and hence attracts the tax capital gains tax. Before making a withdrawal option, consider if you have enough cash to fund the relevant tax payments.

What Are the Possible Ways to Cash Out Large Amounts of Bitcoin?

When it comes to cashing out large amounts of Bitcoin you have a variety of means of cashing out to choose from. You can consider doing it via a third-party broker exchange, a Bitcoin OTC Broker and a peer to peer exchange. However, before you choose any of these options it would make sense to weigh the pros and cons before making your pick.

Crypto Exchange Trading Limits

Most crypto exchange have withdrawal limits on the amount of money you can withdraw each day in return for cryptocurrencies. The limits may vary from one exchange to another. Coinbase sets its limit for withdrawal at $10,000 per day. On the other hand, Kraken allows a maximum withdrawal of $5000 at tier 1. With Kraken, your withdrawal limits will increase depending on the upgrades to your account.

5 Popular Ways to Cash Out Large Amounts of Bitcoin

On Exchange Crypto Trading

On Exchange crypto trading is one of the most popular, safe and reliable means to cash out your bitcoins. Most crypto exchanges are linked to your bank accounts so you can easily transfer and receive funds. However, on exchange crypto trading does not offer much anonymity and you may be subject to a lot of rules and regulations including withdrawal limits.

Bitcoin ATM

A Bitcoin ATM resembles a traditional ATM Machine where it allows you to purchase bitcoins by making a cash deposit. The difference between the two is that a Bitcoin ATM is much sophisticated from a technological perspective as it is based on blockchain technology that sends bitcoins to the user’s digital wallet by using a QR Code.

Over the Counter (OTC) Trading – Off Exchange

OTC Trading is a means of Off Exchange trading that allows you to trade and exchange cryptos with a professional crypto trader that connects a buyer and seller of cryptos. This does not happen via an exchange and is often the best and most convenient way to cash out large amounts o Bitcoins due to the absence of regulation and withdrawal limits.

Peer to Peer Exchange

Peer to peer exchange is also an off exchange means of dealing with cryptos and it simply involves exchanging your cryptos for cash with a trusted person. This is similar to OTC Trading except that there is no middleman. Peer to Peer trading is not the most secure means as it contains a relatively higher risk of being tricked and cheated.

Fintech Apps Trading

By trading via Fintech apps, you can make purchases online using bitcoins and this way, you are free to purchase anything you want by using your bitcoins. Common alternative payment gateways such as PayPal are fintech apps that facilitate the transfer and purchase of items using cryptos. With these fintech apps, you can cash out large amounts of cryptos quite easily and even make purchases using cryptos.

How to Cash Out Large Amounts of Bitcoin on Exchange?

In order to cash out large amounts of Bitcoin on Exchange you need to use a crypto exchange that accepts your crypto in return for fiat money. You can use an exchange to transfer and exchange your earnings from BTC to USD and link your digital wallet to your bank account to ensure the funds are transferred smoothly. However, cashing out on an exchange can be tedious due to the regulation and restrictions involved.

How to Cash Out Large Amounts of Bitcoin Off Exchange?

Cashing out Bitcoin off exchanges is mostly done using a peer to peer exchange or via an OTC Bitcoin Broker. In case of a peer to peer exchange it is quite an informal exchange that happens usually between two known and trusted parties. In case of an OTC Bitcoin Broker, there will be an intermediary i.e.; a professional crypto trader that brings together the two parties to facilitate a bitcoin sale. It is most commonly used to cash out large amounts of Bitcoin. The Bitcoin seller will notify the OTC Bitcoin Broker online of the amount of the intended sale and any conditions by filling up an online form. The broker will then seek a buyer and mediate the transaction.

How to Cash Out Large Amounts of Bitcoin on Peer to Peer (P2P) Exchange?

In case of a peer to peer exchange it is quite an informal exchange that happens usually between two known and trusted parties. It is quite similar to an OTC broker trading, except that there is no broker or intermediary involved. Using a peer to peer exchange mode works best only if both parties are genuine and trust each other.

Best Crypto Exchanges to Cash Out Large Amounts of Bitcoin

Binance

Binance is one of the best crypto exchanges that has stood tall since its inception in 2017 which enables smoother and easier transacting with cryptocurrencies. Binance charges a fee of 0.1% from both the maker and taker which is relatively lower compared to most exchanges. Binance is perfect for those looking to cash out large amounts of cryptos as it offers a wide array of crypto-fiat pairs including the Euro and USD. For those who haven’t provided identity verification then your withdrawal will be limited to two BTC for every 24-hour time period.

Binance US

Binance US is a subset of the Binance exchange platform for cryptos. Binance US has many trading pairs which makes it easier for you to cash out your Bitcoins into either fiat money or cryptos of your choice. However, an interesting observation is that Binance US offers relatively lesser pairs and 22 states in the USA including New York are not supported by the Binance US Platform.

Coinbase Pro

Coinbase has been one of those consistently great and promising exchanges since its inception in 2012. Coinbase offers a wide variety of pairs including crypto pairs and crypto-fiat pairs which allows you to easily cash out large amounts of Bitcoin. The Coinbase Pro account holders have a withdrawal limit of $50,000 per day. One downside to the Coinbase exchange is that its fees are relatively higher than most exchanges.

Gemini

Gemini is one of the most secure and promising US based crypto exchanges that allows you to conveniently cash out large amounts of Bitcoin. It supports over 20 crypto currencies and the maximum withdrawal limit lies at $100,000 per day.

KuCoin

KuCoin has been a popular crypto exchange since its launch in early 2017 and has made its mark for being a reliable and secure exchange. KuCoin is however a non-US based exchange and account holders that have completed the KYC verification enjoy a higher daily withdrawal limit. The daily standard limit for unverified withdrawal lies at 2 BTC per day.

Kraken

Kraken is a trusted Bitcoin exchange that has been around since 2011. It offers more than 20 cryptos but the downside is that it’s a relatively less flexible exchange that has greater KYC and identity verification requirements to be fulfilled before you can set up an account and gear it to withdraw funds. The positive point when considering an exchange to cash out large amounts of Bitcoin is that kraken offers greater liquidity and lower fees.

Bitfinex

Bitfinex is another crypto exchange that allows for cashing out and trading of Bitcoins. However, it is strictly forbidden for US citizens to have a Bitfinex account and Bitfinex has faced several issues with regard to security and safety concerns in the past which makes it a less reliable exchange.

Best FinTech To Cash Out Large Amounts of Bitcoin

PayPal

PayPal has been on the forefront when it comes to development and integration to aid seamless and simple transactions across boundaries. PayPal has announced that in 2021 it will facilitate cryptos including bitcoin to be used as payment for purchases made via the PayPal App. You can also use your PayPal account to connect with other crypto exchanges which will then transfer all the fiat money gained by cashing out your bitcoins on the exchange to your PayPal account which will be linked to your bank account too.

Cash App

As far as crypto currencies are concerned the Cash App only supports bitcoin. Using the cash App you can deposit, trade, withdraw and convert bitcoins. Cash App also allows you to convert your bitcoins to fiat money should the need arise. Cash App basically functions as a third party app that allows you to buy, sell and hold bitcoin.

Transferwise

Transferwise allows for buying cryptocurrencies but there are still controversies regarding its ability to transfer and convert cryptos to cash.

Revolut

Revolut was founded in 2014 and it has evolved to trading with cryptos and currently it supports around six cryptos including Bitcoin and Litecoin. However, the Revolut platform does not allow you to currently withdraw any cryptos or transfer it to other wallets or accounts.

Conclusion

When it comes to withdrawing bitcoins there are a wide variety of options to choose from; a third-party exchange, OTC bitcoin brokers, peer to peer exchanges and so on. Furthermore, we have glossed over the key features and areas of concern and interest for those eager to learn more about how to cash out large amounts of Bitcoin.

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