Tokens (and Trust Lines) on the XRP Ledger

Trading Non-XRP assets on the Decentralized EXchange (DEX) confuses some people when they see a currency code like BTC and confuse it for the original Bitcoin.

All currencies other than XRP can be represented in the XRP Ledger as issued currencies. These digital assets (sometimes called 'Tokens' or 'IOUs' are tracked in accounting relationships, called 'trust lines', between addresses.

Issued currencies can be traded with XRP or each other in the XRP Ledger's decentralized exchange.

In the typical model, an issued currency is tied to holdings of currency or other assets outside the XRP Ledger. The issuer of the currency, [usually] a gateway, handles deposits and withdrawals to exchange currency outside the XRP Ledger for equivalent balances of issued currency in the XRP Ledger.

Source XRPL.org - Issued Currencies Overview

When you have a BTC balance in XUMM, you have a BTC balance with the issuer of the BTC token, usually a "XRP - BTC" gateway.

You have to sign in at the website of the issuer (eg. Bitstamp or Gatehub) and follow their instructions to send the issued BTC token to their platform to redeem.

Alternatively, you can send it as is (cheap and fast) on the XRP Ledger to another XRPL account with the same Trust Line setup using the regular Send flow in XUMM, selecting sending BTC.