Selling crypto? What to know before you cash out.

Selling crypto is easy in theory. Actually, cashing out can be messier.

Depending on how you do it, you could run into trading fees, withdrawal limits, or tax consequences.

Here’s everything you need to know.

There isn’t a bank handing out commission-free cashouts for cryptocurrency. Most of the time, getting your money out will cost you something.

Thankfully for traders and investors, selling crypto is much easier than it used to be. The best option for you usually comes down to what you care about more: Lower fees, speed, convenience, or privacy.

Read more: How to invest in cryptocurrency: A beginner’s guide

For most people, this is the easiest and cheapest option.

A centralized exchange such as Coinbase or Binance lets you sell your crypto for U.S. dollars, park the proceeds in a cash balance, and then withdraw the money to your linked bank account.

That said, don’t simply hit “sell” without checking the fee structure. Some platforms — such as Coinbase and Kraken — charge different rates depending on whether you use a simple instant-sell feature or place an order on a more advanced trading screen.

So what’s typical? If you’re using a more advanced exchange interface, a retail investor might pay roughly 0.60% or less to sell. But if you’re using one of those platforms’ instant-sell or convenience features, the cost can be closer to 1% or more after the spread is baked in.

Standard ACH bank transfers after the sale typically take up to five business days to clear, depending on the exchange.

Some crypto wallets now let you sell directly from the wallet interface through an integrated off-ramp provider. It’s a sort of middle ground between self-custody and convenience.

MetaMask, a popular self-custody Ethereum-compatible wallet, lets users sell crypto in MetaMask Portfolio or its mobile app, and have the proceeds deposited into a linked bank account. Meanwhile, MoonPay says users can sell crypto for fiat and cash out to bank accounts, cards, and, in some cases, services like PayPal or Venmo.

The main appeal here is convenience. If your crypto is already sitting in a self-custody wallet, you may not need to send it to an exchange first.

But convenience has a price. Usually, these wallet-based off-ramps costs land in the roughly 2% to 5% range — much higher than you’d typically pay on an exchange — and those expenses can increase once you include the spread and any blockchain/network fee.

Not all wallets have off-ramps either. Many are still mainly designed for storage, transfers, and connecting to apps, not for moving money back into your bank account.

If your wallet doesn’t have an off-ramp, you usually need to send the crypto to a centralized exchange or another platform that supports selling first.

Some traditional brokerages and investing apps now let you buy and sell cryptocurrency alongside stocks and ETFs.

Fidelity Crypto, for example, lets users buy, sell, and transfer certain cryptocurrencies within an account accessible alongside traditional investing accounts. Robinhood also lets you buy and sell crypto.

This option makes sense for investors who like to keep their financial lives under one roof. It can feel less chaotic than juggling a separate exchange, wallet, and bank account.

The trade-off is that brokerages may offer fewer coins, fewer blockchain features, and less flexibility than a dedicated crypto platform.

Some services now let users cash out crypto at ATMs or kiosks. Coinme, a popular crypto ATM company, advertises tens of thousands of participating locations nationwide.

So, how do you actually connect crypto from a wallet or exchange to an ATM and get cash?

With a service like Coinme, you typically start the sale in the app. You’ll choose the amount of crypto to transfer to the app, confirm the sale, and receive a cash code. Then you go to a participating ATM or kiosk, enter that code, and collect the cash.

In other words, you usually don’t walk up to the machine and “plug in” your wallet. The app or platform handles the sale first, and the machine is just the pickup point.

The upside is obvious: Quick physical cash.

The downsides are also obvious: Much higher fees, lower limits, identity verification in many cases, and scam risk. Crypto ATM fraud has drawn numerous warnings from consumer protection officials.

Fees can also be egregious — anywhere from about 5% to 15% — and some machines run even higher once the spread is baked in.

Fees at bitcoin ATMs also tend to be poorly disclosed. Several companies operating these machines have been investigated by state attorneys general for their lack of transparency surrounding fees.

So, in short, if you’re using a bitcoin ATM, you’re paying a steep premium for access to cash.

“The fees and spread are horrible, and there are plenty of other options,” said Adam Blumberg, a certified financial planner and co-founder of Interaxis, an education firm for fintech, blockchain, and digital assets. “I can’t think of a good reason to use a bitcoin ATM.”

Crypto is an extremely volatile asset. Huge swings up and down are to be expected, especially for smaller coins.

So a big price drop by itself isn’t necessarily a reason to sell, especially if your thesis hasn’t changed and you still believe in the long-term case for the asset.

A smarter move is setting rules before emotions take over.

You might do this by setting layered goals before you invest. For example, you could decide to sell part of your position after a 50% gain. Maybe you trim again if it doubles. On the downside, maybe you use a risk threshold such as selling if the price falls 30% below your entry point.

Another framework involves selling some crypto if the position becomes too large a share of your portfolio.

For a conservative investor, crypto might stay in the 1% to 3% range of total investable assets. Someone more aggressive might tolerate 5% to 10%.

Once a position grows beyond the limit you originally set, selling some crypto to rebalance can be a disciplined move that keeps your holdings aligned with your risk tolerance. If a rally pushed a 3% allocation to 9%, trimming may reduce risk and lock in gains.

Stop orders can help with all of this. A stop order, also called a stop-loss order, executes when the asset reaches a preset trigger price.

“Set the stops to match your strategy or plan,” said Blumberg.

In fact, you can decide under what circumstances you’ll sell your crypto right after you buy it.

Here’s an example: Let’s say you buy ethereum at $2,300.

You could place a limit sell order right after the purchase to sell $1,150 once ETH hits $3,450, which is a 50% gain.

At the same time, you could place a stop-loss order if ethereum drops to $1,610, which is roughly a 30% decline.

This way, you take the stress and emotion out of the equation.

“If you don’t have a plan, you’ll hold too long, or sell too soon,” said Blumberg.

For some bitcoin believers, “never sell” is the whole thesis. That sounds extreme, but in crypto — bitcoin in particular — it’s a real mindset.

They believe bitcoin is a long-term store of value and a hedge against the traditional financial system. So for bitcoin maximalists, volatility is simply background noise.

If you truly believe that strongly in an asset’s future, a hold-forever thesis is possible, said Blumberg.

But it still raises practical questions. Do you really mean never sell under any circumstances? Or do you mean not selling during your peak earning years, but maybe drawing on it during retirement? Or passing it on to your children as part of an inheritance plan?

Those questions matter because “never sell” isn’t really an exit plan. It is a conviction.

“Most bills can’t be paid in bitcoin,” said Blumberg. “So if your life is being negatively affected because of your bitcoin thesis, you might need to re-evaluate.”

Read more: Is bitcoin’s price volatility an investing opportunity? Here’s how to buy bitcoin.

Sticking to your investment thesis will help guide you and be the clearest signal on when to sell. But there are other situations where cashing out is a viable option.

You might decide to cash out your crypto when:

Your original thesis breaks: Maybe the project lost developer traction, got crushed by competitors, ran into regulatory problems, or worst case scenario, turned out to be a scam.

You need the money for a real-life goal: Paying off high-interest debt, building an emergency fund, or scrapping together the last couple-thousand-dollars for a house down payment may be a better use of the funds than speculating on a handful of altcoins.

You can’t stomach the volatility: If crypto swings are wrecking your sleep or distracting you during the day, the position may simply be too risky for you.

A lot of people don’t sell for disciplined, rational reasons. They sell because they got spooked, bored, or pulled into someone else’s opinion.

Behavioral finance research has repeatedly found that investors struggle with the emotional side of selling. One 2023 study found evidence that bitcoin investors were prone to selling winners too early and hanging on to losers too long.

Bad reasons to sell can include:

Your friend told you to.

People on social media are screaming that the market is dead.

You have to sell something so you have enough liquidity to chase a different coin you just heard about.

The price dropped for a week, and now you feel nervous.

That doesn’t mean every emotional sell is wrong. But as a rule, if your reason for selling didn’t exist before you opened X or checked a group chat, it’s probably not a solid reason.

Yes, you must report your crypto sales when you file your annual tax return.

If you sold for more than you paid, that’s usually a gain. If you sold for less, that’s usually a loss. Short-term gains on assets held one year or less are generally taxed less favorably than long-term gains on assets held more than a year.

You’re also taxed if you convert one crypto to another. For tax purposes, that usually means you’re treated as if you sold the first coin and used the proceeds to buy the second one, which can trigger a capital gain or loss even if no dollars ever hit your bank account.

In general, the IRS treats digital assets as property for federal tax purposes. The amount you’re taxed on is the difference between your cost basis (the price you bought it for) and the value when you sold it. So you’re taxed on the gain, not the asset’s entire value.

You’ll need to report digital asset transactions at tax time, and brokers generally must use Form 1099-DA for customer digital asset sales in 2026 and later.

In other words, major exchanges like Coinbase are now reporting your crypto sales information directly to the IRS, similar to how your brokerage company reports your stock sales.

It’s also helpful to keep solid records showing when you bought, what you paid, when you sold, and what fees were involved.

Read more: Yes, crypto is taxed. Here’s when you have to pay.