Cryptocurrency To Cash: How To Convert Your Digital Coins Into Cash

Cryptocurrencies can be converted into cash in two main methods — via exchanges, or via peer-to-peer platforms.

Cryptocurrency is increasingly capturing the attention of investors around the world. As per a report by crypto exchange Gemini in April this year, India lead in the total number of first-time crypto investors in the previous three months, ranking ahead of Brazil and Hong Kong. While the idea of investing in crypto may be lucrative, you can’t really use a crypto coin to pay for services in India as of yet. So far, only a handful of companies in nations such as the US and El Salvador accept cryptocurrency for purchases. So, it’s important to know how to convert your crypto investments into cash.

Before we get into the details on how to convert cryptocurrency to cash, it should be noted that the process will involve taxation on gains, as well as a token fee, which is charged by a third-party broker for its services. In India, crypto gains will face a 30 percent tax, as announced by Finance Minister Nirmala Sitharaman in the Union Budget 2022-23.

How to convert cryptocurrency into cash via crypto exchanges

The safest method to convert cryptocurrency to cash is via third-party crypto exchanges such as CoinSwitch Kuber, Unocoin, WazirX, and others. All you need to ensure is that the platform you’re choosing supports buying and selling in INR. 

First, you need to transfer your crypto assets to an exchange of your choice. There, you should be able to see two options: Deposit and Withdrawal. This can appear under the Funds menu, as seen on WazirX. Keep in mind that the exact names of these options may differ from exchange to exchange, but it shouldn’t be too confusing to figure out.

Once you click on Withdrawal, you will be able to enter the amount you wish to convert and withdraw. After an amount is entered, you should receive an email on a registered ID to help verify the transaction. Once you take care of this quick verification process, your requested amount will reflect in your account within four to six days. Keep in mind that crypto exchanges will charge a transaction fee, which differs from platform to platform. 

How to convert cryptocurrency into cash via peer-to-peer network

While conversion via exchanges is the safest, it does take several days for the amount to start reflecting in your account. A much faster method would be to go through peer-to-peer platforms, such as LocalBitcoins, to sell BTC for cash.

However, you should keep in mind that the chances of fraudulent transactions are quite high on peer-to-peer platforms.

When you sign up on a peer-to-peer platform, you need to choose the location for your ideal buyer. You can use the platform to find buyers and send a trade request. All you need to do now is sell your crypto asset to the buyer in exchange for cash.

Since this is solely a buyer-seller transaction, chances are there may be fraudsters on a platform. However, as a safety measure, most peer-to-peer platforms have an escrow option in place, which would keep your Bitcoins on hold until you can confirm that you have received payment. So, if you choose to use the peer-to-peer method, it's advisable to go for a platform with an escrow option.