- Profits in crypto traditionally came from going long, whereas now the availability of margin trading and derivatives offer the opportunity of short trading.
- Passive investors also take advantage of platforms such as Cred which allow them to lend out their crypto and earn interest.
It’s never been easier to get into cryptocurrencies than it is right now. There are hundreds, if not thousands of exchanges, many of which will allow you to make direct purchases of crypto using your credit card.
Profits in crypto traditionally came from going long, whereas now the availability of margin trading and derivatives offer the opportunity of short trading. Passive investors can also take advantage of platforms such as Celsius or Cred, which allow them to lend out their crypto and earn interest.
However, entering and even earning a profit in cryptocurrency is one thing, but being able to spend it presents another challenge. In the world of traditional finance, the money can be deposited straight from your brokerage account into your current account. In crypto, it depends on where your funds are. Many exchanges don’t handle fiat, meaning you’ll have to send your crypto to an exchange that does. Even then, many banks still don’t trust crypto, so it’s often the case that withdrawals can be cumbersome and slow.
For example, last year, Coinbase users in the UK experienced days-long delays when withdrawing their crypto when Barclays decided to stop offering banking services to the exchange. Some Reddit users report that their banks had frozen their accounts when they attempted to withdraw from exchanges, due to concerns around money laundering.
The fee structures of crypto exchanges also make it uneconomical to withdraw smaller amounts. For example, Kraken charges a flat fee of 0.0005 Bitcoin for each BTC withdrawal. If the price of Bitcoin is $10,000 and you only want to withdraw $100, then you’re paying a $5 fee, which is 5%. Because it’s a flat fee, the percentages reduce if the price of Bitcoin goes down, but then, of course, so do the value of your holdings.
Overall, off-ramping from crypto remains a problem. However, if you’re looking to liquidate your cryptocurrency, there are fortunately a few options available.
Turning Crypto into Cash
One is to use your crypto to pay for goods and services. While Bitcoin and other cryptos aren’t yet widely accepted, there are numerous places you can spend them. Some of the best-known companies that accept Bitcoin are Expedia and Microsoft, along with online services such as Twitch and NordVPN.
Another option is to find a Bitcoin ATM and make a cash withdrawal. Again, Bitcoin ATMs aren’t widely available, but if you can find one in your location, then they offer a fast means of liquidating your Bitcoin without having to wait days for banking transactions to clear. However, the most significant drawback of Bitcoin ATMs is the fees, which can go up to 10%.
Replicating Traditional Payment Cards
Currently, one of the most effective ways to spend your cryptocurrency is to get your hands on a low-cost crypto debit card. Change Invest is an Estonian trading platform offering all its users a black Visa debit card automatically when they join the exchange.
The card operates in the same way as a standard Visa debit card. , you can spend your holdings deposited on the exchange anywhere that accepts Visa - some 40 million locations worldwide. You can also use the card to convert your crypto to Euros by withdrawing cash from a standard ATM. Ten assets are supported.
There are no monthly maintenance fees, just a one-time delivery charge of €4.95 for the card to be sent to your home within ten business days.
The Change Invest platform also makes it easy to buy, sell, and trade crypto via its mobile app, which is available via the Apple App Store and Google Play Store. It appears to be popular with users, gaining ratings over 4.5 out of 5 stars on both platforms. The platform is also low fee and doesn’t charge any commission whatsoever when converting between BTC and fiat or USDT.
Finally, there is one more option for liquidating your crypto, and that’s to use a peer-to-peer exchange such as LocalBitcoins or Paxful. They’ll connect you with a buyer or seller in your area so you can trade directly. It can be faster than withdrawing via an exchange and offers more anonymity. The escrow service means you have some assurance that you’ll get your money, but it’s worth doing some basic research on your counterparty as well.
As crypto matures, we can hope that the banks become more trusting, and the off-ramping process improves. In the meantime, use one of the options listed here if you need to liquidate your crypto in a hurry, and want to avoid exchange fees and the scrutiny of your bank.