How To Cash Out Your Crypto Or Bitcoin | Bankrate

2024.12.12 21:08

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How to cash out your crypto or Bitcoin

Written by Brian Baker, CFA , Brian Baker, CFA Senior writer, Investing and Retirement Expertise • Investing • Wealth management 14 Years of experience Brian Baker covers investing and retirement for Bankrate. He is a CFA Charterholder and previously worked in equity research at a buyside investment firm. Baker is passionate about helping people make sense of complicated financial topics so that they can better plan for their financial futures. Read more Connect with Brian Baker, CFA on Twitter Connect with Brian Baker, CFA on LinkedIn Get in contact with Brian Baker, CFA via Email Close Brian Baker, CFA , Edited by James Royal, Ph.D. James Royal, Ph.D. Principal writer, Investing and wealth management Expertise • Investing • Wealth management Bankrate principal writer and editor James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more. Read more Connect with James Royal, Ph.D. on Twitter Connect with James Royal, Ph.D. on LinkedIn Get in contact with James Royal, Ph.D. via Email Close James Royal, Ph.D. Published on September 30, 2024 | 4 min read

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Table of contents

Use an exchange to sell crypto Use your broker to sell crypto Go with a peer-to-peer trade Cash out at a Bitcoin ATM Trade one crypto for another and then cash out Back to top Michael M. Santiago/Getty Images

Table of contents

Use an exchange to sell crypto Use your broker to sell crypto Go with a peer-to-peer trade Cash out at a Bitcoin ATM Trade one crypto for another and then cash out Table of contents Back to top

Table of contents

Use an exchange to sell crypto Use your broker to sell crypto Go with a peer-to-peer trade Cash out at a Bitcoin ATM Trade one crypto for another and then cash out

Our writers and editors used an in-house natural language generation platform to assist with portions of this article, allowing them to focus on adding information that is uniquely helpful. The article was reviewed, fact-checked and edited by our editorial staff prior to publication.

Cryptocurrencies have rebounded in 2024, leaving some traders with solid gains. Some crypto holders may be looking for ways to cash in on current market enthusiasm by selling their digital assets.

If you’re selling any asset, then you’ll want to understand the tax implications. You may owe a bundle if you’re booking a capital gain , and the tax rate will depend on the holding period, among other things. Of course, you may be able to claim a write-off if you’re selling at a loss. But if you think crypto may continue its recovery, it might be better to stick around and wait.

Here are five ways you can cash out your crypto or Bitcoin .

1. Use an exchange to sell crypto

One of the easiest ways to cash out your cryptocurrency or Bitcoin is to use a centralized exchange such as Coinbase . Coinbase has an easy-to-use “buy/sell” button and you can choose which cryptocurrency you want to sell and the amount.

You’ll quickly exchange cryptocurrency into cash, which you can access from your cash balance in Coinbase. From there, you can transfer the money to your bank account if you wish.

And while Coinbase is a popular option to sell cryptocurrency, it’s likely most useful to go with whatever exchange currently holds your coins , if you don’t have custody of the coins yourself. Some of the top exchanges include Binance and Kraken .

2. Use your broker to sell crypto

If a broker holds your crypto coins, then the easiest route is simply to go with that broker. For example, if you’re a client of Robinhood or Webull , both of which allow extensive crypto trading, then it will be easiest for you to just execute a trade on their platform and be done with it.

After you complete the trade, you’ll have the cash in your account and be ready to trade again.

With the introduction of spot Bitcoin ETFs in 2024, investors have a simple way to buy and sell Bitcoin using a familiar structure. ETFs trade on an exchange and are available through most brokers and the expense ratios on several funds are below what you might pay to trade on a crypto exchange.

3. Go with a peer-to-peer trade

You can also do a direct trade, selling your cryptocurrency directly to another person through another entity. The most popular way is through a peer-to-peer online platform that allows sellers to find the best offers through an exchange, though one could even do it in person if needed.

With an online peer-to-peer trade, you can sell cryptocurrency online in exchange for dollars. These transactions are often facilitated by an exchange, and Binance runs a well-known online peer-to-peer platform called Binance P2P. After agreeing to a trade, the platform escrows your crypto. Once you check the transaction record in the payment account and make sure you have received the money from the buyer, Binance will release the crypto to the buyer on the platform.

Another popular option is the online platform Paxful. Sellers have the ability to set their own rates and can choose from more than 350 payment options, such as cash, gift cards or other digital currencies. Clients can sell directly to over 12 million users worldwide, according to the platform’s website.

4. Cash out at a Bitcoin ATM

Cashing out at an ATM is the equivalent of selling your Bitcoin, says California Bitcoin ATM company Hermes Bitcoin. Bitcoin ATMs are a way to get immediate access to cash using your bitcoins. Bitcoin ATMs do not operate like traditional ATMs. In order to make a cash withdrawal and sell your Bitcoin from the ATM, the machine provides a QR code to which you send your Bitcoin. You simply wait a couple of minutes and receive your cash.

The commissions on Bitcoin ATM trades can be tremendously high , however, so it’s important to note how much you’re paying and whether it’s worthwhile to go another route.

5. Trade one crypto for another and then cash out

Some exchanges do not allow the conversion or selling of some cryptos to dollars, so you’ll need to take an indirect route to get your cash. Depending on which exchange you use, you may need to transfer or convert your cryptocurrency to another popular currency such as the stablecoin Tether, before finally converting to dollars.

Bottom line

Traders have a number of ways to sell their cryptocurrency. Popular crypto exchanges are always a good bet, as they are reliable and well-known, while online platforms with peer-to-peer selling may allow for flexibility of payment. You can go the convenient route and use a Bitcoin ATM to get fast access to your crypto but at a significantly higher commission.

If you sell your cryptocurrency, however, it’s important to understand that you could be creating a tax liability, so you’ll want to be sure you account for taxes in your decision to sell .

— Bankrate’s Logan Jacoby contributed to an update of this article. Former Bankrate reporter Georgina Tzanetos contributed to an earlier version of this article.

Cite us Quick citation guide Select a citation to automatically copy to clipboard. APA: Baker, CFA, B. (2024, September 30). How to cash out your crypto or Bitcoin. Bankrate. Retrieved December 12, 2024, from https://www.bankrate.com/investing/how-to-cash-out-crypto-bitcoin/ Copied to clipboard! MLA: Baker, CFA, Brian. "How to cash out your crypto or Bitcoin." Bankrate . 30 September 2024, https://www.bankrate.com/investing/how-to-cash-out-crypto-bitcoin/. Copied to clipboard! Chicago: Baker, CFA, Brian. "How to cash out your crypto or Bitcoin." Bankrate. September 30, 2024. https://www.bankrate.com/investing/how-to-cash-out-crypto-bitcoin/. Copied to clipboard! Share this article Share this article Close Written by Brian Baker, CFA Senior writer, Investing and Retirement Connect with Brian Baker, CFA on Twitter Connect with Brian Baker, CFA on LinkedIn Get in contact with Brian Baker, CFA via Email Read more from Brian Brian Baker covers investing and retirement for Bankrate. He is a CFA Charterholder and previously worked in equity research at a buyside investment firm. Baker is passionate about helping people make sense of complicated financial topics so that they can better plan for their financial futures.

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