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.


Drone delivery is still in the future, but you can now swap bitcoin for Amazon vouchers
(Image credit: Credit: Mopic / Alamy Stock Photo)

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).

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".

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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.

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.

Ben Judge

Ben studied modern languages at London University's Queen Mary College. After dabbling unhappily in local government finance for a while, he went to work for The Scotsman newspaper in Edinburgh. The launch of the paper's website,, in the early years of the dotcom craze, saw Ben move online to manage the Business and Motors channels before becoming deputy editor with responsibility for all aspects of online production for The Scotsman, Scotland on Sunday and the Edinburgh Evening News websites, along with the papers' Edinburgh Festivals website.

Ben joined MoneyWeek as website editor in 2008, just as the Great Financial Crisis was brewing. He has written extensively for the website and magazine, with a particular emphasis on alternative finance and fintech, including blockchain and bitcoin. As an early adopter of bitcoin, Ben bought when the price was under $200, but went on to spend it all on foolish fripperies.