There comes a time in every investor’s journey when you want to realize the gains from your cryptocurrency investments. Cashing out on Coinbase is a straightforward process, but doing it correctly ensures your money arrives safely and efficiently in your bank account.
This guide will walk you through the entire process, from selling your crypto to initiating a bank transfer.
Before You Begin: Prerequisites for Cashing Out
To successfully withdraw cash, you need two things set up in your Coinbase account
- A Verified Account Your identity must be verified, and your account must be in good standing.
2. A Linked Bank Account You must have a valid bank account linked to your Coinbase account. Typically, this is done via PLAID for instant verification or through a manual verification process.
The Two-Step Process to Cash Out
Cashing out is not a single action but a two-stage process: first converting crypto to traditional currency, then moving that currency to your bank.
1: Sell Your Cryptocurrency
This step converts your digital assets into U.S. Dollars (or your local currency), which are held in your Coinbase USD balance.
- Log In and Navigate Sign in to your Coinbase account, either on the app or website.
2. Select Your Asset From your portfolio, choose the cryptocurrency you wish to sell (e.g., Bitcoin, Ethereum).
3. Initiate the Sale Click the “Sell” button.
4. Enter the Amount Choose the amount you want to sell. You can select a preset amount or “Max” to sell your entire holding.
5. Choose Your Cash Account Ensure the “Cash out to” destination is set to your USD Wallet (or your local currency wallet).
6. Review and Confirm Check the details, including the sale price and any fees. Once you are satisfied, confirm the transaction.
Your sale is now complete. The cash from the sale will be available in your Coinbase fiat wallet.
2: Transfer to Your Bank Account
Now, you will move the cash from your Coinbase USD balance to your linked bank account.
- Go to Your Portfolio On the website, navigate to “Assets” and select your USD balance. On the app, tap on “My Assets” and select your USD balance.
2. Select “Cash Out” You will see an option to “Cash out.”
3. Choose Your Bank Select your linked bank account as the destination.
4. Enter the Amount Input the amount of cash you wish to transfer.
5. Complete the Transfer Review the details and confirm the transaction.
Understanding Transfer Timelines and Fees
Standard Bank Transfer (ACH) This is the most common method. Transfers are usually free but are not instant. It typically takes 1-3 business days for the funds to appear in your bank account.
Instant Transfers For a fee (usually 1.5%), you can opt for an instant transfer to your debit card. This is significantly faster but comes at a cost.
Important Considerations Before Cashing Out
Transaction Fees Remember that Coinbase charges a spread-based fee for the “Sell” transaction in Step 1. This is separate from any transfer fees.
Tax Implications Selling cryptocurrency is a taxable event in many countries, including the U.S. You are responsible for reporting capital gains or losses on the sale when you file your taxes.
Market Volatility Crypto prices can change rapidly. The price you see when you initiate the sale is not locked in until you confirm the transaction.
Conclusion: A Simple Path to Your Funds
Cashing out on Coinbase is a secure and user-friendly process when you follow the correct steps. By first selling your crypto to your USD wallet and then transferring those funds to your bank, you can efficiently access your money.
Always double-check the destination accounts and be aware of the timelines and fees associated with your chosen transfer method to ensure a smooth experience.
Disclaimer This guide is for educational purposes only. Fees, timelines, and features are subject to change by Coinbase. Always refer to the official Coinbase help center for the most current information and consider consulting with a tax professional regarding your specific situation.