Legally cashing out cryptocurrency involves selling assets on a regulated exchange (e.g., Coinbase, Kraken, Binance), transferring the fiat currency to a linked bank account, and reporting capital gains/losses on taxes. Key methods include using centralized exchanges, crypto debit cards, or P2P platforms to convert to USD/EUR.
You can use a crypto exchange like Coinbase, Binance, Gemini or Kraken to turn Bitcoin into cash. This may be an easy method if you already use a centralized exchange and your crypto lives in a custodial wallet. Choose the coin and amount you'd like to sell, agree to the rates and your cash will be available to you.
You can sell crypto for fiat and withdraw the funds to your bank account or to a Visa debit card in Exodus Mobile, Exodus Desktop, and Exodus Web3 Wallet. Selling crypto with MoonPay in Exodus is available in many countries, and can be completed in USD, EUR, or GBP.
Exchanging your crypto for cash should be just as straightforward as buying it. With MetaMask, you can sell your crypto in a few simple steps directly to payment methods like a debit or credit card, PayPal, or a bank account.
Most crypto platforms require selling crypto before withdrawing cash. Crypto withdrawal fees come from multiple layers, not just the blockchain. Withdrawal times depend on exchanges, banks, and location. Country-specific rules still affect many users.
Centralized exchanges like Coinbase, Binance, and Kraken are the easiest way to cash out cryptocurrency. These exchanges allow you to sell your crypto for fiat — then transfer the funds to your bank account!
The IRS can and does track crypto by combining blockchain analysis with user data from crypto exchanges. Centralized exchanges must report user activity directly to the IRS, via Form 1099-DA and 1099-MISC. Failure to report can lead to audits, back taxes, penalties, and even criminal prosecution.
You're required to pay tax on the profit you made from your sale (total sale price of your cryptocurrency minus original purchase price), commensurate with your personal tax bracket. So under these rules, you may be looking at quite a large capital gains tax assessment.
Selling crypto in a year when your income is lower can reduce the taxes you owe. Gifting cryptocurrency is generally not a taxable event for the giver. Crypto IRAs allow you to hold cryptocurrency long-term while deferring or avoiding taxes.
If you've recently purchased crypto via card, ACH your crypto may be subject to a holding period. During a holding period, you cannot withdraw from your cash (GBP, EUR, or USD) account, send funds to your Wallet, or send to an external wallet.
Laszlo Hanyecz, a programmer and early Bitcoin miner, famously traded 10,000 Bitcoin for two Papa John's pizzas on May 22, 2010, marking the first documented commercial transaction for physical goods with cryptocurrency, a day now celebrated as "Bitcoin Pizza Day". At the time, the Bitcoins were worth only about $41, but the value of those coins would later grow to be worth hundreds of millions, even over a billion dollars, making it one of history's most expensive pizzas.
Let's review five of the most common crypto-to-cash solutions, so you can find the best way to cash out crypto.
Choose the crypto you wish to convert. Click 'Sell' and select a fiat currency (e.g., GBP) Select 'Withdraw' to send the money to your bank account.
Sell or cashout processing time
Selling crypto to your Coinbase cash balance is instant, making funds available right away for purchases or withdrawals (minus any funds on hold).