What's a bitcoin really worth to an American?

June 16, 2017 9:57 AM

I've noticed that BTC prices have recently surged to about $2,500 per coin. However, reading a bit makes it seem as though this is fairly hard to cash out into actual U.S. dollars, due to American banks being reluctant to work with BTC. If you're an american with 4 Bitcoins (for example) how much could you realistically cash that out for at a moment's notice? [Caveat: I am not at all interested in trading in BTC, just generally curious.]
posted by codacorolla to Computers & Internet (7 answers total)

Coinbase, Gemini, and Kraken are three Bitcoin exchanges that operate in the U.S. They follow all the relevant regulations and allow you to buy and sell Bitcoin, as well as a few other cryptocurrencies.
posted by anb at 10:13 AM on June 16, 2017 [1 favorite]

Some Bitcoin ATMs buy Bitcoin for cash. I can't say I've ever had reason to sell more than $100 worth, but for those smaller amounts it works fine with zero hassle. It might be more of a pain (thanks to KYC rules) if you were trying to do $2000+, which I suppose is now less than 1BTC.

Aside from the online exchanges, the other option is selling to an individual using localbitcoins or similar, now that Circle has stopped buying/selling BTC.

In general, buying them is a bit easier, since all the ATMs sell BTC for cash and there are services like LibertyX that allow any store with a Verifone terminal to sell BTC.
posted by wierdo at 10:54 AM on June 16, 2017

LocalBitcoins.com is still a thing, though maybe not for very large amounts.
posted by floatboth at 12:34 PM on June 16, 2017

Note that the actual question is "If you're an american with 4 Bitcoins (for example) how much could you realistically cash that out for at a moment's notice?"—not, say, "Are there services that allow you to cash out bitcoin, though maybe not for very large amounts?" Since I too am (mildly and theoretically) interested in the answer to the actual question, it would be nice if someone would focus on it. Four bitcoin are apparently worth about $10,000; can you get that at a moment's notice, or would it take time and research?
posted by languagehat at 1:48 PM on June 16, 2017 [1 favorite]

It would take time but not research. You have to get an account (5 mins) deposit the BTC (1 hour), sell the BTC (1 minute), and withdraw the USD to your bank account (several days--especially the first time due to Know Your Customer financial regulations). All these steps are straightforward.
posted by anb at 2:05 PM on June 16, 2017 [5 favorites]

Keep in mind also that bitcoin is (theoretically) a currency for buying and selling of actual goods and services, and as such "cashing out" is not the only option. Perhaps equally important, can one buy the equivalent of $10,000 worth of goods or services with 4 BTC?

According to a cursory googling, one can if those goods and/or services are available from Dell, Overstock.com, Newegg, Tiger Direct, MovieTickets.com, Microsoft (games, videos, and apps only), Expedia (hotels only), Dish Network, AirBaltic, or LOT Polish Airlines. And that's just the big ones.

For the philanthropic, there are a whole slew of charities accepting bitcoin, such as the United Way, the American Red Cross, Heifer Int'l, and unsurprisingly many tech oriented types like the Mozilla and Wikimedia foundations, archive.org, the EFF, and Khan Academy.

So if you want to take several hundred people to the movies or to Latvia or make a rather significant charitable donation, you can "cash out" your bitcoin fortune instantly.
posted by MoTLD at 12:02 AM on June 17, 2017 [1 favorite]

Best answer: From a MeFite who wishes to remain anonymous:

To answer the question specifically, it depends on your specific account limits with whichever exchange you're dealing with.
Coinbase: 15k USD sell limit/week.
Gemini: 10k USD sell limit/day, 15k USD sell limit/month.
Kraken: Up to 100k USD sell limit.

Note that these are daily withdrawal limits from your exchange account in USD. The only publicly listed limits that I can see is from Gemini. You can search for "[exchange name] withdrawal limit" and can find some answers, but I can't seem to find anything specific apart from someone mentioning a 3k USD withdrawal limit on Coinbase. You can also find screen captures if you search by images.

The above figures can be found by creating an account on the exchange in question. The limits can be increased through varying means: either trading more to incrementally increase your limit on Coinbase, or applying for higher limits, eg: with Coinbase or Kraken. With Kraken, there are verification tiers with their own specific limits.

Those are your withdrawal limits. At a moment’s notice, the amount you can actually cash out depends on the price you are looking to get for your Bitcoin. If you are looking to sell 4 BTC at “market” value, you should have no problem selling them immediately. If you are looking to sell 4 BTC at a different value, you may have to wait, depending on demand. If you are looking to sell 400,000 BTC, you may have difficulty finding enough buyers for the BTC, in addition to figuring out a way to withdraw that much money from whichever exchange you use. You can get a sense of what people are buying/asking for here.

There is nothing to stop you from making accounts on multiple exchanges, then transferring your BTC to each exchange and to collectively have a higher withdrawal limit.

Additionally, there is time to get your USD from the exchange to your bank account, either by ACH or wire transfer.

Many people are paranoid when it comes to trading in cryptocurrency, and for good reason. Verify everything you see here for yourself. If you are not familiar with trading BTC or withdrawing from exchanges, practice with very small amounts first. Quadruple check everything.

Finally, please note if you do not already have an account on an exchange, it takes time not only to create one, but to be verified. There has been an explosion in interest recently in Ethereum, and all three exchanges listed above are taking days if not weeks to verify for higher limits.

posted by Eyebrows McGee at 9:27 PM on June 18, 2017 [2 favorites]