Rounding it up
There are four primary options for cashing out Bitcoin in Canada: exchanges, brokers, Bitcoin ATMs, and peer-to-peer marketplaces.
Every method of cashing out Bitcoin has its own advantages and disadvantages.
Exchanges and brokers are the most popular option for converting crypto, though fees can vary widely from platform to platform.
A Bitcoin ATM is a convenient option for getting physical cash after selling your Bitcoin, but be prepared to spend a lot in fees.
Peer-to-peer marketplaces let you set the terms of your Bitcoin sale; however, they come with additional financial and legal risks.
If you own some Bitcoin, at some point, you’re going to want to exchange it for cash. While cryptocurrencies may one day be how we buy and sell goods and services, they don’t currently have the versatility of the good ol’ Canadian dollar.
But how do you cash out Bitcoin for cash in Canada?
Exchanging your Bitcoin for Canadian dollars might sound like a challenge, but it can be a fairly straightforward process. In this article, we’ll walk you through what you need to do to swap your Bitcoin for some loonies and toonies so you can make the most of your crypto.
Cashing out Bitcoin in Canada: know your options
Whether you’re new to Bitcoin or you were an early adopter, at some point, you’ll want to cash out your crypto and exchange it for cold, hard cash.
Thankfully, when the time comes to convert your crypto into fiat currencies (that’s the fancy term for legal tender national currencies, like the Canadian dollar), you have a lot of options at your disposal. Each of these options provides different advantages and disadvantages for you as a seller of Bitcoin.
In general, you’ll find that there’s a trade-off between convenience and cost-effectiveness when cashing out Bitcoin. If you opt for a more convenient cashing out method, you’ll often receive less than the true market value of your coins. However, if you choose a less convenient method of converting your Bitcoin, you might get a better exchange rate.
With that in mind, here are the 4 most popular methods of cashing out Bitcoin in Canada.
Option 1: sell your Bitcoin on an exchange
Your first option for getting cash for your Bitcoin is to sell your crypto on an exchange.
An exchange is effectively an online marketplace that collects buy and sell orders for a given crypto trading pair (for example, Bitcoin to Canadian Dollar or Ethereum to Euro). Traders can enter buy or sell orders on an exchange and the exchange will match compatible orders to execute trades in real-time.
There are dozens of exchanges that operate in Canada, including big names like Coinbase and Gemini. These exchanges give you a straightforward and convenient way to sell your Bitcoin as quickly as possible. Some more exchanges also give you the option to input a minimum sell value (known as a limit order), so that you won’t get short-changed on your Bitcoin.
If you’re looking to get the best possible exchange rate for your Bitcoin, selling on a major exchange is usually the best move. However, fees for these exchanges can vary widely and some are quite expensive. Always double-check any potential fees before you confirm a sell order.
Option 2: swap your Bitcoin using a broker
If you want a slightly more convenient option than selling your Bitcoin on an exchange, you might want to consider swapping your coins using a broker.
The terms ‘broker’ and ‘exchange’ are often used interchangeably in the crypto world, but they have different meanings. While an exchange is a trading terminal that connects buyers and sellers, brokers help facilitate your trades on an exchange.
Most broker services have simplified trading terminals where you simply enter the amount of Bitcoin you want to sell and what currency you want to receive in return. Once you confirm your trade, the broker will route your trade on an exchange and deposit the proceeds of the transaction into your account.
The advantage to broker services, which you can find on platforms like Bitbuy, is that they’re simple and easy to use. You don’t need to know much about trading crypto in order to cash out Bitcoin with a broker. However, you’ll often pay way more in fees than you would with an exchange.
Note that many platforms actually offer both broker and exchange services.
For example, a firm’s instant buy or sell feature is normally a broker service. These same companies might also offer an advanced trading terminal that gives you access to live order books on the platform’s exchange. You can often get better prices on the exchange, but this comes at the expense of convenience.
Option 3: convert your Bitcoin using an ATM
One of the newest options for cashing out Bitcoin is to use a Bitcoin ATM. But, while they might share similar names, Bitcoin ATMs and regular ATMs are not the same.
Bitcoin ATMs are stand-alone kiosks that connect to the internet so that they can process crypto transactions on the blockchain. Most allow you to deposit cash (either with physical cash, a debit card, or a bank transfer) so that you can buy crypto with the push of a button. Any crypto that you buy will then be transferred to your crypto wallet where you can store it or spend it as you please.
Although they’re not as common, some Bitcoin ATMs also let you cash out your crypto. To do so, you’ll usually need to enter your crypto wallet’s public address (or scan a QR code). Then, you’ll enter how much Bitcoin you want to sell and how you’d like to receive your funds. Some Bitcoin ATMs can give you physical cash while others will transfer money to a digital wallet that can support Canadian dollars.
Keep in mind that it can often take a while to get cash using a Bitcoin ATM service, like the Ottawa-based bitMachina. This is because transactions can take anywhere from 1 minute to a few hours to process on the blockchain. Until your transaction processes, you can’t receive your cash.
Additionally, Bitcoin ATMs can be very expensive to use. Some charge as much as 10% to buy or sell crypto, which can quickly eat away at the value of your assets. Therefore, converting Bitcoin at a Bitcoin ATM is generally only best if you need access to physical cash.
Option 4: trade your bitcoin with a peer-to-peer marketplace
The final option for cashing out Bitcoin in Canada is to use a peer-to-peer (P2P) marketplace.
As the name suggests, a peer-to-peer marketplace is a platform that connects buyers and sellers of cryptocurrencies so that they can trade directly with each other. This makes P2P marketplaces different from exchanges, where the exchange’s order book serves as an intermediary between buyers and sellers.
There are a number of popular P2P marketplaces out there where you can sell Bitcoin for Canadian dollars. These include platforms like LocalBitcoins, LocalCryptos, Paxful, and Bisq. Each offers its own unique features, pros, and cons, so it’s important that you do your research before selecting a marketplace.
The benefit of a P2P marketplace is that it gives you a platform to trade directly with others. This might not sound like a big advantage, but it means that you often have access to a wider range of payment methods, like bank transfers, PayPal, wire transfers, and sometimes cash.
Since you’re trading directly with other users, you can set the terms of your trade. You can decide how much you’re willing to sell your Bitcoin for, so you can often get a better deal on your crypto.
However, with all this flexibility comes additional risk. Peer-to-peer marketplaces come with a heightened risk of fraud because you don’t really know who it is that you’re trading with. Most P2P platforms have some form of an escrow system to help stop scammers in their tracks. But they don’t always work and there are plenty of horror stories out there of people losing large amounts of money on these marketplaces.
Also, there are some serious questions out there about the legality of selling crypto on a P2P platform. Some countries view selling on these marketplaces as a business activity, so you might need to be registered as a financial business to be able to do so legally.
Therefore, if you want to cash out your Bitcoin using one of these P2P marketplaces, you should have a good understanding of the financial and legal risks involved with doing so.
Convert Bitcoin into cash with ease
If you want to cash out your Bitcoin in Canada, you have plenty of options. Selling your Bitcoin on an exchange or with a broker is usually the simplest and most convenient option. However, you can also cash out your Bitcoin using a Bitcoin ATM or a peer-to-peer marketplace.
Each of these options comes with its own benefits, drawbacks, and risks. Before you cash out your crypto, be sure to thoroughly research your options to ensure that you understand what you’re getting into.
Gaby Pilson is a writer, educator, travel guide, and lover of all things personal finance. She’s passionate about helping people feel empowered to take control of their financial lives by making investing, budgeting, and money-saving resources accessible to everyone.