How to Convert Crypto to Cash: Step-by-Step Guide for 2025

Want to turn your Bitcoin, Ethereum, or other crypto into real money you can spend? You’re not alone. Millions of people hold crypto not just as an investment, but as a way to access cash when they need it. But turning digital coins into bank dollars isn’t always straightforward. There are risks, fees, and steps you can’t skip - especially if you want to avoid scams or tax traps.

Why you might want to cash out crypto

People sell crypto for all kinds of reasons. Maybe you bought Bitcoin at $30,000 and it’s now at $70,000 - you want to lock in profits. Or perhaps you need to pay rent, buy a car, or cover an emergency. Some folks just don’t trust crypto to hold value long-term. Others use crypto as a bridge to traditional banking, especially if they’re unbanked or underbanked.

Whatever your reason, the goal is simple: get your crypto’s value into your bank account, safely and legally. But you can’t just click a button and expect cash to appear. You need the right tools, timing, and knowledge.

Choose a trusted exchange

The first step is picking a platform that lets you sell crypto for cash. Not all crypto wallets let you cash out directly. You need a crypto exchange that supports fiat withdrawals - meaning it connects to your bank account or payment service like PayPal or Apple Pay.

In 2025, the most reliable exchanges for cashing out crypto include:

• Coinbase - Popular in the U.S., Australia, and Europe. Lets you sell crypto directly to your bank account in AUD, USD, EUR.
• Binance - Global leader. Offers bank transfers and P2P trading in over 100 countries.
• Kraken - Known for low fees and strong security. Good for larger amounts.
• Bitstamp - One of the oldest exchanges. Trusted in Europe and Australia.
• LocalBitcoins - Peer-to-peer platform where you trade directly with other people using cash, bank transfer, or even gift cards.

Don’t use random apps you found on Google. Stick to exchanges with a track record, clear licensing, and customer support. In Australia, ASIC-regulated platforms like Coinbase and Kraken are your safest bet.

Verify your identity

Before you can sell crypto for cash, you’ll need to complete KYC - Know Your Customer. This means uploading a photo of your driver’s license or passport, and sometimes a selfie holding the ID. It’s annoying, but it’s required by law to stop money laundering.

Most exchanges take 1-3 business days to verify you. Some, like Coinbase, can do it in under an hour if your documents are clear. If you’re rejected, double-check that your ID isn’t expired, blurry, or cropped. Don’t try to use fake documents - exchanges use AI to spot fakes, and you could get banned.

Sell your crypto for fiat currency

Once verified, log in and go to the “Sell” section. Pick the crypto you want to cash out - say, 0.5 BTC. The platform will show you the current price in AUD. You can choose to sell all of it, or just a portion.

Here’s what happens next:

1. You confirm the amount and price.
2. The exchange converts your crypto to AUD (or USD, EUR, etc.).
3. The fiat amount is held in your exchange wallet - not as crypto, but as real money.

Watch the fees. Coinbase charges about 1.49% for bank transfers in Australia. Kraken charges 0.1% for limit orders but up to 1.5% for instant sells. Binance’s P2P trades often have lower fees, but you’re dealing with individuals - so read reviews before trading.

Withdraw to your bank account

Now that your crypto is cash, you need to get it into your real bank account. Go to the “Withdraw” or “Cash Out” section. Select your linked bank account. If you haven’t linked one yet, you’ll need to add it. In Australia, you’ll need your BSB and account number.

Withdrawal times vary:

• Bank transfer (SEPA, BECS): 1-3 business days. Free or low cost on most platforms.
• Instant transfer (via PayPal or PayID): 10-30 minutes. Usually costs 1-2%.
• Debit card withdrawal: Some exchanges let you load cash onto a crypto debit card (like Crypto.com or BitPay). You can spend it like a regular card, but fees add up.

Pro tip: Use PayID in Australia. It’s faster than BSB/account numbers and works with most major banks like NAB, Commonwealth, and ANZ.

Watch out for hidden costs

Many people think they’re getting the full value of their crypto - but fees eat into profits. Here’s what you’re really paying:

• Trading fee: 0.1%-1.5% when you sell.
• Withdrawal fee: $5-$25 for bank transfers, depending on the platform.
• FX fee: If you’re converting from USD to AUD, some platforms add 1-2% for currency conversion.
• Network fee: If you moved crypto from a wallet to the exchange first, you paid a blockchain fee (usually $1-$10 for Bitcoin or Ethereum).

Example: You sell $5,000 worth of Ethereum. Coinbase charges 1.49% to sell ($74.50), $15 to withdraw, and 1% FX fee if you’re converting USD → AUD ($50). Total fees: $139.50. You get $4,860.50. That’s 2.8% gone before you even touch your bank account.

Taxes are unavoidable

Every time you sell crypto for cash, the Australian Taxation Office (ATO) treats it as a capital gains event. That means you owe tax on the profit - not the total amount you sold.

Here’s how it works:

• If you bought 1 ETH for $2,000 and sold it for $4,000, your capital gain is $2,000.
• If you held it less than 12 months, you pay tax on the full $2,000 at your income tax rate.
• If you held it over 12 months, you get a 50% discount - so only $1,000 is taxable.

Keep records. Use a tool like Koinly or CoinTracker to auto-track your buys, sells, and fees. The ATO can access exchange data - don’t assume you’ll slip under the radar. Fines for undeclared crypto gains can hit $10,000+.

Alternative: Peer-to-peer (P2P) trading

If you want more control or lower fees, try P2P platforms like Binance P2P or LocalBitcoins. Here, you sell directly to another person. You set your price, and they pay you via bank transfer, PayPal, or even cash in person.

Pros:

• Often lower fees than exchanges.
• You can negotiate prices.
• No need to wait for bank processing - payment can be instant.

Cons:

• Higher risk of scams. Always use escrow - never send crypto before payment clears.
• Some buyers use stolen funds. If your bank reverses the payment, you lose your crypto and your money.
• Not ideal for large amounts. Stick to under $5,000 unless you know the buyer well.

Always check the buyer’s trade history and feedback score. Avoid anyone with less than 100 completed trades.

Don’t use crypto ATMs unless you’re desperate

Crypto ATMs let you sell Bitcoin for cash in minutes. But they’re expensive. Fees range from 7% to 20%. You’re paying $70-$200 to get $1,000 out. Plus, most don’t support altcoins like Ethereum or Solana.

Only use them if you need cash right now - say, you’re stuck without a bank account and need $200 for groceries. Otherwise, it’s a terrible deal.

What to do after you cash out

Once the money hits your bank account, don’t just spend it. Think about what’s next:

• Reinvest some if you still believe in crypto - but don’t chase pumps.
• Pay off high-interest debt - crypto gains are great, but credit card interest is worse.
• Save it in a high-interest savings account. In 2025, Australian banks are offering 5%+ on term deposits.
• Consult a financial advisor if you’re cashing out a large sum - $10,000+.

And remember: cashing out crypto doesn’t mean you’re done with it. You can always buy back in later. But once you sell, you’re out of the market - so make sure it’s the right move for your finances.