Bitcoin is having an excellent year. As of this writing, the cryptocurrency has gained by more than 130%. As such, the price has outperformed the overall stock market as measured by the S&P 500, which has gained by less than 15%. Those people who bought Bitcoin as the year started have made a lot of money and many analysts expect the price to continue rising. This article explains how you can cash out Bitcoin.
Why Bitcoin is Gaining
In our previous article on Bitcoin, we explained its foundation, its climb and its fall. We also assessed some of the reasons why it might continue moving higher. The current rally is attributed to a number of reasons.
First, there is increasing mass acceptance of the digital assets. Earlier this year, Morgan Stanley, which transacts trillions of dollars every day announced that it was in the process of creating its own digital asset to facilitate international funds transfer. This was followed by the announcement that large companies like ETrade and Fidelity were creating their own custodial services.
Second, as the adoption of currencies emerged, Facebook too announced that it was creating its own digital currency, which will be used in the international funds transfer. Last week, the project attracted large companies like Visa, Mastercard, and Uber, which invested more than $10 million. Further, AT&T became the first large company to start accepting payments using Bitcoins.
Third, Bitcoin is expected to go through halving in the coming year. This is a process through which the rewards that miners get are reduced by half. In the run up of all halving activities, the price tends to rise sharply. In fact, the price of Litecoin has gained by more than 300% this year as the halving period nears.
Fourth, after its large crash a year ago, many speculators moved to buy the currency on the cheap hoping that the price will rise. This is a common trading strategy known as statistical arbitrage, where people buy assets that underperformed in the previous year.
How to Cash Out Bitcoin
If you have been buying Bitcoin, there are chances that you might want to cash out, after growing your income by more than 100%. There are some valid reasons why you might consider doing this. For example, you might believe that the risk of a downside are more than that of an upside. Second, you might be thinking about the fact that most of the Bitcoin in circulation is owned by a small group of investors. As such, it is not used for transactions, which is the main reason why it was created. Here are a few ways you can cash out Bitcoin.
- Sell on a Cryptocurrency Exchange. This is the most common method of cashing out your bitcoins. In the method, you just go to one of the most popular exchanges like Kraken and Coinbase and sell your coins. Then, you can use their withdrawal methods to deposit funds to your account.
- Use a Bitcoin ATM. There are more than 2000 Bitcoin ATMs around the world. If you are close to one, you can easily go and withdraw your funds there.
- A Bitcoin debit card: There are a number of companies that offer these cards. A good example is bitpay and Spectropay.
- Sell it to friend: finally, you can sell the bitcoin to a friend and receive the dollars.
Bitcoin is the oldest and biggest cryptocurrency in the world with a market capitalization of more than $150 billion. The currency has performed relatively well this year and a number of analysts expect it to continue doing well. However, the reality is that no one knows how Bitcoin will perform in future because of its high volatility. Therefore, if you own some Bitcoins, it makes sense to cash out some of it so that you can be safe. This article has explained a few of the most common ways you can use to cash out Bitcoin.