For the past few months, Bitcoin has been rallying to all-time highs, but anyone who wants to take profits might struggle to cash into banks. It is because some banks are refusing transfers from bitcoin exchanges.
HSBC, one of the world’s largest banks, does not process cryptocurrency payments and does not allow customers to transfer money from digital wallets. While other leading banks accept transfers from digital wallets to checking accounts, many bitcoin holders cannot use their credit cards to buy or sell bitcoin.
Why Banks Are Hesitant
With the price of bitcoin soaring this week after rising about 300% last year, this may be the first time many people have decided to cash out profits.
To buy cryptocurrency, you need to use an exchange like Coinbase to open an account. After you deposit funds into your account via wire transfer or using a debit or credit card, you can buy and sell Bitcoin. Banks that accept transfers from digital wallets ask users to convert bitcoin to a fiat currency such as pound sterling, euro, or dollar to cash in profits.
Since some banks are reluctant to accept wire transfers, there is a risk that their profits will remain on the platform and become unusable until they find a company that does. Experts advise people to ask their bank for their guidelines before investing in bitcoin or any other cryptocurrency.
The money laundering problem is at the root of bitcoin skepticism. The nature of cryptocurrency makes it challenging to trace origins, so many believe this is the perfect way for criminals to cover up their activities.
Trading Bitcoin Simplified Over the Years
In some ways, the pandemic underscores the need for sustainable market investment opportunities by 2021. What started as a search for interest rates above inflation has become a more profound need for growth and security. Now people are looking to diversify into alternative investments, and cryptocurrencies offer everything from secure guarantees to security protection to currency trading.
Adrian Lowcock of investment platform Will Owen said Bitcoin trading has gotten easier over the years, as most exchanges have been improving their processes since the currency’s last rally three years ago.
However, he warns that it often depends on the platform you’re buying cryptocurrency on and how you buy it, whether it’s easy to sell or not. Unlike cash, Bitcoin cannot process many transactions required to be a cash alternative.
Coin Corner’s Danny Scott said that they haven’t made it difficult for their customers to liquidate their bitcoins for a while. Banks are more comfortable with bitcoin as long as the funds’ source is exact; there are no issues.