The trials of turning bitcoin into cash

Making your fortune in bitcoin is all very well. But how do you actually turn it into cash you can spend? Ben Judge explains.


You spent £20 on half a bitcoin a few years ago on a whim. Now it's worth four grand and you want to get your hands on that cash. What do you do? As with most things bitcoin-related, it's a complex and far from speedy process.A popular way is to sell using a cryptocurrency exchange. If you don't already have an account with one, you will have to create one, which involves verifying your identity by uploading a copy of your ID documents. You then have to transfer your bitcoins from your wallet, which involves a transaction fee the average fee is currently sitting at around $15, but has been as high as $50 and, depending on the fee you paid, face a nervous wait for the transaction to be processed.

The next step is to link your bank account to your exchange account and verify it by making a small payment say £10. Most exchanges are based abroad, and many don't accept sterling (there are some UK-based exchanges Coinfloor is one). So you will probably need to make a payment in euros via a Single Euro Payments Area (Sepa) transfer most UK banks make a charge for these, somewhere between £5 and £20 (though they don't charge to receive funds).

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

An alternative is to use a peer-to-peer service, such as This can be a bit daunting you are transferring your bitcoins to someone you've never met, trusting they will pay you what you have asked. But reputable services hold funds in escrow until both parties have upheld their side of the deal. If you'd rather spend your bitcoin than cashing out in one, you could try using a bitcoin prepaid debit card. Until recently, there was a wide choice available, but that has narrowed. Many cards were provided by Gibraltar-based firm WaveCrest. But earlier this year Visa Europe terminated its Visa membership due to "non-compliance with [Visa's] operating rules".

Yet another alternative is to use your bitcoins to buy gift cards. GiftOff accepts over 40 digital currencies with which you can buy vouchers to spend at retailers such as Amazon, Tesco and Argos, as well as Google Play and iTunes, and claims to accept "orders of any size". Do bear in mind transaction fees, however it's hardly worth buying a £50 gift card if you have to pay $25 in miners' fees.

Advertisement - Article continues below

Whatever you decide to do to get your money out of bitcoin, you may face hurdles with your bank. Many UK banks are reluctant to accept large deposits from cryptocurrency exchanges as they are wary of falling foul of anti-money-laundering rules. As Obi Nwosu, chief executive of Coinfloor told the Financial Times, "European banks are more comfortable with the idea of banking with bitcoin companies UK banks are taking a lot more time to get comfortable". Also remember you may need to pay tax on profits.

News bytes... Zopa reopens to new business

Peer-to-peer lender Zopa has reopened its platform to new investors. Zopa closed its doors to all but existing investors last March after it introduced an Innovative Finance Isa (IF Isa), which saw demand from investors swell. Last week, however, it said new investors could once again invest in its platform. There are currently around 26,000 people on its waiting list. Anyone wanting to join now can expect a wait of up to a month before they can put their money to work. Existing customers, however, can get a "fast pass", which will push family and friends to the front of the queue. Zopa claims investors can expect a return of between 4% and 4.6%.

Last week $534m-worth of cryptocurrency was stolen from Japanese exchange Coincheck. The digital currency stolen was in the form of XEM tokens, used on the blockchain and smart-contracts platform NEM. Coincheck said it would compensate everyone who lost money, though it is unclear whether it can do this and stay in business, says Robin Harding in the Financial Times. NEM Foundation vice-president Jeff McDonald said on Sunday that he hopes to trace the tokens, as there is a "full account" on the blockchain. "At this time, the hacker has not moved any of the funds to any exchange, nor to any personal accounts of NEM community members," he said.

London-based film finance company The Fyzz Facility, which has invested more than $280m in feature films in the past seven years, has launched an IF Isa which it says will return 5% a year from investing in independent film productions featuring stars such as Rosamund Pike, Clive Owen, and Keanu Reeves. The product has a minimum investment of £2,000, which will be used to acquire five-year bonds issued by TFF Capital. The money raised will be lent to The Fyzz Facility. There are hefty fees, however: a £50 opening fee and yearly charge, a 0.75% charge on all subscriptions, plus a further annual fee of 0.75% of total funds held.




The currencies to bet on this year

The US dollar could be set to weaken this year, while the euro, Canadian dollar and the Swiss franc could be good bets for optimistic traders.
17 Jan 2020

Bitcoin has just crashed hard – where will it go next?

The bitcoin price has taken a beating, down by 15% in one day. Dominic Frisby looks at what’s behind the crash, and where the cryptocurrency might go …
25 Sep 2019
Spread betting

Another bubble in bitcoin for traders to short

This surge in the bitcoin price seems no more likely to endure than the last one, says Matthew Partridge.
16 Jul 2019

Bitcoin is back in a bear market – but don’t sell now

After its recent spectacular rise, bitcoin suffered a whopping great selloff that, technically, put it back in a bear market. But that doesn’t mean yo…
3 Jul 2019

Most Popular


Three things matter for the UK housing market now – and “location” isn’t one of them

The UK housing market is frozen. And when it does eventually thaw out, the traditional factors that drive prices will no longer apply. The day of reck…
1 Apr 2020

What does the coronavirus crisis mean for UK house prices?

With the whole country in lockdown, the UK property market is closed for business. John Stepek looks at what that means for UK house prices, housebuil…
27 Mar 2020

Oil shoots higher – have we seen the bottom for the big oil companies?

Just a few days ago everyone was worried about negative oil prices. Now, the market has turned upwards. John Stepek explains what’s behind the rise an…
3 Apr 2020
UK Economy

How the coronavirus pandemic is killing cash

Covid-19 is making a huge difference to the way we live, work and do business. One of its less obvious effects, says Merryn Somerset Webb, is to accel…
31 Mar 2020