Learn what “cashing out” crypto really means, why people sell, and the safest ways to convert cryptocurrency into fiat. This step-by-step guide covers exchange platforms, P2P trading, and crypto ATMs—plus fees, taxes, scams, and common mistakes to avoid.
Last Updated: February 06, 2026 at 8:00 PM UTC +1
Published: February 06, 2026 at 7:56 PM UTC +1
Human Written ContentHuman Written Content
So you have crypto that you want to turn into cash, but don’t know how to. Before going into the steps on how, we first need to discuss the what and why—what is cashing out, and why am I cashing out?
Both of these questions are important to consider before beginning the process of converting your crypto to cash. Cashing out your crypto may seem as simple as trading one currency for another, but that is not the case here. Cashing out is more on the spectrum of selling your crypto and getting the money back for what the market determines it is worth. So instead of converting, you are selling, and there are many steps that go into that process, which we will later go through using various methods .
Before cashing out, consider why you are wanting to sell. Some users are simply wanting to hop off the rollercoaster of the market, and others may be selling their assets to more stable money, such as cash or fiat, during a high-demand market. This allows the user to secure their profits and lower the risks that come along with the volatility of crypto. Regardless of which of these scenarios fit your situation, there are important warnings to consider before moving ahead.
When selling your crypto, there are fees that are applied to your transaction that you have to pay. These fees can become pricey depending on the type of transaction. Later on, we will discuss these fees in more detail but for now, it is important to understand transactions are not free.
Along with these fees, selling crypto triggers capital gains taxes that treat your profits as property and not necessarily currency. Users are to report their gains and losses to the IRS when taxable events occur, such as selling your crypto from digital currency to fiat. They are then categorized into short-term (under a year) or long-term (over a year), which can affect the tax rates.
Both of these processes can cause users to lose money when selling, but the real risks are the scams that can occur when selling. The most common scam users can encounter is fake websites that pose as real exchanges to inevitably steal your funds. They can allow for users to make small withdrawals at first to help build trust in the beginning, but then pull the rug from underneath you and freeze the transaction or demand fees to release your funds. Other scams include:
Impersonation Scams: Scammers, presenting as customer support or law enforcement, stating that you owe them money or have an issue with your account. They then try to get you to transfer your funds to their “secure” wallet or use a malicious QR code for you to use a crypto ATM.
Phishing Scams: Scammers send you malicious, infected website links via email or text to try to get you to enter your private information regarding your funds.
P2P Scams: A buyer might send a fake transaction receipt or proof of payment to pressure you into sending them the crypto before the payment becomes verified or reversed.
Crypto selling can become very complex, but it doesn’t have to be. Staying aware of the risk can help users be more efficient and careful when selling. Now that we have done over the what and the why, let’s move onto the how of the situation.
Before going into the methods and steps of how to convert and sell your crypto, there are a few things you will need before beginning any of these processes. First, if you are using an exchange platform, you will need to have a verified account. Most major exchanges require KYC before completing any transaction to ensure security and legal compliance across their platform.
Next, you will need to make sure you have a bank account that is ready to receive the “cash”, also known as fiat payment. Ensuring you have a proper bank account can help with the smoothness of the transaction with minimal hiccups or drawbacks.
Another consideration is to make sure the crypto wallet you are using supports the network you are wanting to use. If not, this can cause a number of headaches and make it to where you cannot complete the transaction. Lastly, make sure you have your ID on hand. Even when having a verified exchange account, additional compliance reviews and your ID may be required in order to complete the transaction.
Below are ways that users can convert their crypto to cash.
Step 1: Choose an exchange
Find an exchange that you want to use to transfer your crypto to.
Note: Many wallets have exchange platforms built into them.
Step 2: Complete verification
Exchanges require users to complete a KYC process, so you will need to complete this before moving forward.
Step 3: Transfer your crypto
Transfer your crypto assets to the selected exchange by using the exchange’s deposit address.
Step 4: Begin the sale
Navigate within the exchange site to the sell or trade section.
Select the currency you are wanting to sell.
Next, select the type of fiat you want to receive.
Finally, enter the amount you are selling and press confirm.
Step 5: Withdraw
Once you have completed the sale, the exchange will display your fiat balance.
You are then able to select “withdraw”.
By pressing this, you can transfer the funds to your bank account via ACH or wire transfer.
Peer-to-peer (P2P) sales are exactly what they sound like. There are two parties when it comes to this conversion: the person with the crypto that wants to sell for fiat, and the person wanting to buy crypto using fiat. The person with the crypto lists their asset on an exchange site, chooses a buyer, and receives their fiat directly before releasing their crypto.
There are security measures to ensure this process goes smoothly, such as ensuring payment via your bank account, using a secure chat room, and using the exchange’s escrow services. In the end, both parties benefit from the trade and everyone is happy.
Step 1: Choose an P2P platform
Find a platform that you want to use to transfer your crypto to.
Step 2: Navigate to P2P Trading
Within the platform, navigate to the section labeled “P2P Trading” or “Buy/Sell”.
Step 3: Begin the Sale Order
By selecting ‘Sell’, choose the currency you are wanting to sell.
You can then put filters for fiat currency, amount, and preferred payment method.
After this, select a buyer and select ‘Sell’ to confirm the sale.
Buyers have ratings, therefore sellers look for buyers with good completion rates.
Step 4: Finish the sale process
Enter the amount to sell, verify payment details, and select confirm. The crypto will then be held in escrow as security for both parties.
Step 5: Wait
Wait for the buyer to send the funds.
Note: It is important to check your bank account directly to verify the payment went through properly. Also check the amount, and NEVER rely on screenshots from the buyer.
Step 6: Release the Crypto
Once you have confirmed the payment with your bank, select that you have received the payment and confirm the release to send the buyer the crypto.
It is important to notate all chats that have occurred and to verify every last detail before releasing the crypto to the buyer—name on both the platform and bank transfer as well as the amount being transferred.
Just as fiat uses ATMs, crypto also offers ATMs for users. These ATMs are often referred to as Bitcoin ATMs, although they do support other cryptocurrencies to be used.
Step 1: Locate a Crypto ATM
Find an ATM and ensure they support selling. Not all ATMs support this.
Step 2: On the screen, select “sell crypto” (it may say “Withdraw Cash”)
Step 3: Enter your phone number for it to send you a verification code.
Step 4: Select the amount you are wanting to withdraw.
Step 5: Scan the QR displayed with your preferred mobile wallet app.
The QR code leads to the ATM’s wallet address.
Step 6: From the app, transfer the same amount that is requested by the ATM.
Step 7: Wait for the transaction to be confirmed on-chain. This can take anywhere from a few minutes to an hour.
Step 8: Once the transaction has been confirmed, the ATM will notify you via text message to let you know you can return to the ATM.
Step 9: When returning, select “redeem” and enter the code from your transaction receipt to receive cash.
Note that just like real-money ATM transactions, these crypto ATMs charge extra fees to use their services. According to some sources, these fees can cost anywhere from 6% to 20% of the total transaction, depending on the ATM being used. These ATMs also have limits to how much and often you are able to withdraw in a day.
When it comes to cashing out your crypto, many confusions can happen during the process. There are common misunderstandings, whether that be due to the lack of communication from the source you are using or users not paying attention. Below is a list of common mistakes users, both beginners and daily users, make and how to avoid them.
Not paying attention to every little detail can lead to multiple mistakes, such as sending the funds to the wrong address or using the wrong network.
How to avoid: Double checking and verifying the exact details before making a transaction can help prevent losses.
Some users can leave their funds in the exchange wallet instead of securing them in a private wallet before selling.
How to avoid: Make sure to secure your funds before the transaction can help you avoid losing funds.
Many users lead with their emotions when it comes to making decisions, which can lead them to rushing to sell without a plan when a market crash occurs.
How to avoid: When realizing you are in a rush or panic, take a step back and assess the entirety of the situation and why you are selling. Rushing can lead to other mistakes such as the others listed here.
Users may run into platforms that are unregulated or phishing sites and platforms that can lock or steal funds from users.
How to avoid: Making sure that the platform is properly regulated before using can help avoid running into this issue.
If a user fails to properly track their transaction or calculate the capital gains tax, it can lead to legal issues.
How to Avoid: Keeping detailed records of every single transaction that occurs in order to comply with the tax laws set in place by the IRS.
Making sure that you avoid these common mistakes can not only save you from a headache of problems, but in some cases can save you from losing your funds.
With any transaction that happens on the blockchain, there are going to be fees. Whether they are the typical gas fees or fees from the source and platform you are using, there will be additional prices added when selling your crypto in order to complete this service.
Quickly going over what gas fees are, they are the transaction fees that are paid to the miners and blockchain verifiers. These fees get added on to the transaction or can be taken away from the amount you are receiving. These fees are given to them in the form of the blockchain’s native token.
Other fees can include trading fees, withdrawal fees, cash-out fees, and other specialized fees. But you may be asking: how does this affect me? Or, how can I avoid paying them? How do I put this gently?… you can’t. There are ways to minimize the amount of fees, but at the end of it all, there is no way you are making a transaction without paying a fee. Nothing comes for free. All of these fees will vary in price depending on the type of transaction as well as the platform being used. Certain platforms provide lower fees than others, so make sure to research before settling on the first one you see.
Below is a list of the different fees, and maybe by understanding them, you can better understand how to minimize them.
Trading fees: These are the fees that are charged to users in order to make the trade occur.
Withdrawal fees: These are the fees charged when moving your fund between wallets such as an exchange to an external wallet.
Fiat cash-out fees: These are the fees that are charged to users converting their cryptocurrency to fiat and withdrawing it to a bank using ACH or a wire transfer.
Network fees: These are the fees we discussed earlier that are called gas fees. Just a typical transaction fee.
Specialized fees: These are fees that are added for using an ATM, platform escrow fees when trading P2P, and the fees when using a crypto debit card.
Each of the methods, exchange, P2P and crypto ATMs, can be beneficial to utilize not only depending on the type of transaction but the person who uses it. This is nothing like a horoscope, or destiny, where just one is for you but instead can change in an instance. For example, using an exchange platform to then transfer to a bank account is best suited for a user who is looking for a direct, easy-going, and safe way to convert crypto into cash.
Whereas, using P2P trading is for a user who longs for flexible payment options and pricing. These users also are ok with going out of their way to complete extra steps in order to avoid scams and verifying the person who is buying. Those who go for a crypto ATM approach are looking to get fast cash and don't mind paying extra to do so.
While all of this is a lot of information, cashing out is doable and becomes less complicated once you have learned the proper steps. Making sure you are aware of the risks, knowing your options and everything included will not only better help you with your journey with cashing out but also help with your overall understanding of crypto.
An online, digital market place that allows crypto users to buy, sell or trade digital assets using fiat or other cryptocurrencies.
Trading digital assets peer-to-peer without a centralized intermediary. Users connect on P2P platforms and agree on an amount and payment method with the platform helps with security throughout the transaction.
A physical kiosk, almost like a transition ATM model, that lets crypto users to buy and sometimes sell crypto with cash and debit cards. These ATMs connect through blockchain rather than a bank account.
Yes. When using crypto and blockchain technology for any type of transaction, there will be some type of fee added onto the transaction.
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