How to Sell Your Crypto and Cash Out
People that do not own any cryptocurrency often ask how to cash out cryptocurrency. This is a valid question. You do not want to get into crypto to then be stuck without a way out.
The good thing is that there is more than one way you can sell your cryptocurrency. You are never going to be stuck with it.
Something you would need to check when you cash out cryptocurrency is the tax consequences of it. Not all countries are the same. Additionally, the tax rules for crypto may change with more regulation. So you should be mindful of this when you sell.
How to sell Bitcoin and Other Cryptos
Most people that buy crypto, go through the reverse process to sell it. Of course, if it suits you to do so you could always do the same. Otherwise, it is no big deal if you decide to choose a different method.
To clarify there are many thousands of cryptocurrencies. Most of them you can only buy from exchanges. Major cryptos like Bitcoin and Ethereum have more options for purchasing and hence selling.
Here is a complete list of different methods on how to cash out cryptocurrency. Also included are the pros and cons should there be any.
How to Cash Out Cryptocurrency Using an Exchange
Firstly we will get into the main method of selling cryptocurrency which is to use an exchange. Exchanges are the easiest and most convenient way to buy and sell crypto.
Cashing out cryptocurrency would require the reverse process of buying. To buy you would need to select an exchange, deposit and buy. As is outlined in the how to buy cryptocurrency guide. If you follow the best practices you would have also transferred your crypto from the exchange to a hardware wallet.
If you want to sell you would need to transfer your crypto from the hardware wallet onto the exchange. You can then make the exchange and deposit the money back into your bank account. We will go through the process in more detail further down.
Selling is Usually Easier Than Buying
Selling crypto is an easier process than buying crypto. This is because we are assuming you would have set up everything when you buy. As a result, you would not need to set up an account with a crypto exchange. You would use the same account. Additionally, you will not need to set up the hardware wallet again.
What could happen is that after a while of not using the exchange, they may ask you for updated information. Or else they could ask for more proof of identification documents for their due diligence for KYC regulations.
However, some people never bought and received crypto instead. So here is how to cash out cryptocurrency in detail using an exchange.
1. Select the Exchange
If you do not have an exchange account you can have a look at the exchanges list below. You should pick the one you think is best for you. All of these exchanges are good and hence popular exchanges.
So really there is not much difference in which one you pick. To clarify, they all support the most popular cryptos; Bitcoin and Ethereum, but they do not support all cryptos.
Best Cryptocurrency Exchanges
2. Sign up
Once you have picked an exchange you are able to move on to signing up. This part is relatively straightforward and exactly like signing up to other websites. However, there are some differences.
Additionally, you will need to state whether you are 18 and over. This is because cryptocurrency exchanges have to follow strict international regulations.
Here are a couple of examples of sign-up pages:
3. Verify your account
Now that you have done the initial sign up you will need to verify your email. Moreover, you will need to verify your identity with the exchange. You will need to supply government-issued ID cards or passports and perhaps some other documents.
It would depend on how much cryptocurrency you have. The more you have the more documents you will need to submit. Quite a lot of cryptocurrency exchanges automated the verification process. So you can easily take a picture when the exchange asks you to and submit it.
Additionally, they may require you to also take a selfie with your government identification. All you need to do is follow the instructions on the exchange.
If you decide to use a DEX (decentralised exchange) you will not need to go through this process. This is because they are unregulated exchanges. To clarify we cannot guarantee their liquidity and governments are not fond of DEX’s. So it may be better to stick to regulated exchanges. You should note that none of the recommended exchanges on this page are DEX's.
4. Send Crypto to the Exchange
Now you will need to send your crypto to the exchange. Firstly you will need to get the wallet address of the exchange. You can do this by pressing ‘Receive’, ‘Funding’ or ‘Deposit’. You have to make sure you select the correct cryptocurrency you want to send to the exchange.
Here is what you will see once you press ‘Receive’ on Coinbase:
After you press “I understand” it will load to this page:
After that, you will need to access the wallet that has your cryptocurrency and select ‘Send’ or ‘Withdraw’. You will need to input the address you got from the exchange. Additionally, you will need to select how much crypto you want to send. You can send part or all of it.
Once you have done that press ‘Send’. You will need to wait until your crypto goes into the exchange. This may take minutes or up to an hour depending on which crypto you are sending.
5. Cash out your cryptocurrency
When your cryptocurrency has reached the exchange you should get a notification via email. Login to the exchange and go to ‘Sell’. The interface should look similar to Coinbase’s interface:
After that, you will need to select the crypto you want to sell and select the currency you would like to receive. Then you should select how much you want to sell and press ‘Sell’.
The funds should go into your fiat currency account instantly.
6. Withdraw From the Exchange
You cannot withdraw to a credit card, but you can withdraw using other methods. One of the cheapest ways to withdraw your money from the exchange is by using a bank transfer.
If you are familiar with bank transfers the process is exactly the same in this case. In other words, you will need to get your bank details and input them into the exchange. When you are on the exchange you will need to go to your fiat account (euro, dollar etc).
On Kraken, you would need to go to ‘Funding’ and click either the large ‘Withdraw’ button. Or click on the up arrow in the line of the account you want to withdraw from.
On Coinbase you would need to go to Assets in the left navigation menu. After that, you need to scroll down to the account and click on the line. Of course, your account will have funds unlike the example below. In this case, I wanted the Euro account.
The interface will change and it will show you a box where you can input the amount you want to cash out.
Save Money on Fees When You Cash Out Cryptocurrency
If you want to save money on fees you consider using a trading platform instead of an exchange. Trading platforms have substantially lower fees than exchanges.
However, trading platforms are a lot more complex than exchanges to use. For this reason, beginners should stay away from using trading platforms. More experienced investors that have seen trading platforms before could consider giving them a try. This is only if you do research on how to properly use a trading platform.
You will have to learn how to navigate the trading platform. Additionally, you will need to figure out the maker and taker areas. You can have a look at recommended trading platforms here.
These platforms are different even though they are all trading platforms. They have been picked to satisfy different client needs and ensure you will find the one most suitable for you.
More Ways to Cash out Cryptocurrency
Exchanges are not the only way to cash out cryptocurrency. There are other ways you can cash out which we will now go through.
Sell to Someone Else Directly
Say you have a friend that is interested in buying cryptocurrency. You could always deal with them directly and sell the coins to your friend. You will be able to set an agreed-upon rate for the exchange. As a result, both of you will be able to get rid of the additional fees that come with using exchanges.
How to Cash Out Cryptocurrency Using an ATM
Another way to cash out is by using a crypto ATM. Unfortunately, there are only a small handful of cryptos that you can cash out with this method, such as Bitcoin and Ethereum.
You cannot withdraw unlimited amounts of cash from a crypto ATM. So of course, if you have large sums it is best to use an exchange. Otherwise small amounts are fine.
There are plenty of ATMs, especially in North and Central America and Europe. You can check for an ATM near you using CoinATMRadar. This site lists all the ATMs where you can cash out particular cryptos all over the world.
You have to make sure that you select ‘sell’ when you are looking for the right ATM. This is because not all ATMs allow customers to both buy and sell crypto.
You should be aware that ATMs often tend to charge high fees for using them. Unfortunately, ATM companies supplying these machines do not disclose their fees. They usually charge an average of 8% fees. However, they can go as high as 25%. For this reason, you have to be careful about which ATM you choose to use.
CoinFlip ATMs tend to charge lower fees of 6.99%, plus around $1 network mining fee. You can read more about the ATM fees should you want to.
To find out how to cash out cryptocurrency using a crypto ATM:
Indirect Ways to Own Crypto and Then Cash Out
There are other ways you can buy and hence sell cryptocurrency. Exchanges are the most popular method and a direct method to own crypto.
However, there are other methods which you can use to buy crypto. With these methods, you would have to follow the reverse process to cash out cryptocurrency.
Other ways of owning crypto are through brokers, mutual funds, ETFs and stocks. These products cannot be interchanged. So if you have funds or crypto in any of these products you cannot buy one product and sell another.
However, between exchanges, crypto ATMs or directly selling to someone you can do this. This is because the transaction is registered on the blockchain. So it doesn’t matter which method you use. For example, you can buy using an ATM and then sell your crypto using an exchange.
On the other hand with these other financial instruments, you cannot do that. So if you buy ETFs then you have to sell ETFs. However, you can use a different broker to sell your ETFs. All you have to do is transfer them to the new broker.
There aren’t that many mutual funds, ETFs and stocks which are crypto-oriented.
Exchange Your Crypto for Goods and Services
For those that are not aware, instead of selling your crypto, you can consider spending it. You can exchange your crypto for goods and services you wish to use. You can do this by applying for a crypto card.
Crypto cards are either Visa or Mastercards. Consequently, these crypto credit cards give you the flexibility to spend your crypto anywhere. This would include online shops and brick-and-mortar stores that accept any credit or debit cards.
Crypto cards work the same way as other cards except they also support crypto. In other words, you load your crypto card with crypto using an App.
When you go spend your crypto, the card will make the transaction in either of two ways. It will either automatically make the exchange into the fiat currency accepted at the store. Or else you will need to top up your fiat account by making an exchange from crypto to fiat.
Of course, not all cryptos are supported on these crypto cards. Some support quite a lot, while others just support Bitcoin. This is something we expect to change in the future as crypto cards become more popular. The best cards available at the moment include Advcash, Crypto.com, and Wirex.
Since you are reading this article, you may need some other information which you may find helpful. For this reason, you can read our blog post on crypto basics which is about the crypto space.
There are also cryptocurrency tips where you will find tips before and after you buy cryptocurrency. This article also talks about the Bitcoin halving which is essential information.
There are various blog articles on topics from investing in Bitcoin to the cryptos outperforming Bitcoin.