The basic process: sell first, then transfer
To move cryptocurrency into your bank account, you sell the crypto on an exchange, and the exchange sends the money to your bank. You cannot transfer cryptocurrency directly into a bank account the way you transfer dollars between two banks — crypto and dollars are different things, so a conversion step is required in between.
The exchange you use to sell is usually the same place where you bought the crypto, though you can use a different one if you want. The exchange holds your crypto, you tell it to sell at the current market price, and once the sale completes, you request a withdrawal to your bank account. That withdrawal typically takes one to five business days, depending on your bank and the exchange.
The amount you receive in your bank account will be less than the dollar value of the crypto you sold, because the exchange charges a fee — usually between 0.5% and 2% of the sale amount. Some exchanges also charge a separate withdrawal fee when money leaves the platform.
Key Takeaways
- You must sell your cryptocurrency on an exchange before any money can reach your bank account; crypto cannot be transferred directly to a bank.
- The exchange you use charges a fee to sell (typically 0.5% to 2%) plus sometimes a separate withdrawal fee, so the amount you receive will be less than the crypto's market value.
- Withdrawal times range from one to five business days depending on your bank and the exchange, and weekends or holidays can add delay.
- You will need to provide your bank account number and routing number to the exchange, and the exchange will verify your identity before allowing large withdrawals.
- The IRS treats the sale of crypto as a taxable event, so you should keep records of the sale price and date for tax purposes.
Which exchange to use and what information you need
If you already own crypto, it is sitting on an exchange where you bought it — Coinbase, Kraken, Gemini, or another platform. You can sell it there and withdraw to your bank. If you own crypto in a private wallet (software you control yourself rather than an exchange), you will need to transfer it to an exchange first, then sell it. That transfer takes time and costs a fee, so most people use the exchange where they already have an account.
Before you can withdraw money to your bank, the exchange will ask for your bank account number and routing number. Your routing number is a nine-digit code that identifies your specific bank; you can find it on a check, by calling your bank, or by logging into your online banking. The exchange will also ask you to verify your identity — usually by uploading a photo ID and sometimes by confirming a small deposit the exchange sends to your account first.
Large withdrawals (the threshold varies by exchange, but often $10,000 or more) may trigger additional verification steps or waiting periods. This is a federal requirement, not something the exchange invented.
How to sell your crypto and request the withdrawal
Log into your exchange account and find the section for selling or trading. You will see your crypto balance and the current market price. Enter the amount you want to sell — you can sell all of it or just part. The exchange will show you the fee it will charge and the dollar amount you will receive after the fee. Review that number, then confirm the sale.
Once the sale completes (usually when ready), the dollars sit in your exchange account as a balance. You then go to the withdrawal or transfer section, select your bank account, and enter the amount you want to send. The exchange will ask you to confirm the bank account details and may send a verification code to your email. After you confirm, the withdrawal request is submitted.
The exchange will send the money to your bank using the ACH system, which is the standard way banks transfer money electronically. ACH transfers typically take one to three business days, though some banks are slower. You can usually check the status of the withdrawal in your exchange account under "transaction history" or "withdrawals."
Why the withdrawal might take longer than expected
The stated timeline of one to five business days assumes normal circumstances. Weekends and federal holidays do not count as business days, so a withdrawal requested on Friday afternoon may not arrive until Wednesday. If you request a withdrawal on a holiday, the clock does not start until the next business day.
Some banks process ACH transfers more slowly than others, particularly smaller banks or credit unions. If your bank is not one of the largest national banks, add an extra day or two to the timeline. You can call your bank to ask how long ACH deposits typically take to appear in your account.
If a withdrawal does not arrive within the timeframe the exchange stated, contact the exchange's support team with your withdrawal request number (you should have received this in a confirmation email). Do not assume the money is lost — delays happen, but the exchange can track where the transfer is in the system.
Understanding the tax implications
When you sell cryptocurrency, the IRS treats it as a taxable event. This means you owe tax on the profit you made, calculated as the difference between what you paid for the crypto and what you sold it for. If you bought Bitcoin for $30,000 and sold it for $45,000, you owe tax on the $15,000 gain.
You do not owe tax on the full $45,000 — only on the profit. However, you do need to report the sale on your tax return, even if you made a loss. Keep records of the date you bought the crypto, the price you paid, the date you sold it, and the price you sold it for. Most exchanges provide a transaction history you can read for this purpose.
The tax rate depends on how long you held the crypto. If you held it for less than a year, the profit is taxed as ordinary income at your regular tax rate. If you held it for more than a year, it may may have access to for a lower long-term capital gains rate. A tax professional can help you understand what you owe based on your specific situation.
What to do if your exchange does not support withdrawals to your bank
Some smaller or international exchanges do not offer direct bank withdrawals. If your exchange does not have a withdrawal option to your bank account, you have two choices: transfer the crypto to an exchange that does support bank withdrawals, or use a peer-to-peer service.
To transfer to a different exchange, you generate a wallet address on the new exchange, then initiate a transfer from your current exchange to that address. The crypto moves to the new exchange (this takes time and costs a network fee), and then you can sell it and withdraw to your bank. This process is slower and more expensive than selling on your current exchange, so it is worth checking whether your exchange offers bank withdrawals before you move the crypto.
Peer-to-peer services like LocalBitcoins or Paxful connect you with people who want to buy crypto directly. You sell to them, and they send you money through a payment method you choose — sometimes bank transfer, sometimes PayPal or other services. These services are less regulated than major exchanges, so research the seller's reputation before you agree to a trade.
Common problems and how to avoid them
The most common mistake is entering the wrong bank account number or routing number. Double-check both numbers before you confirm the withdrawal. If you enter the wrong information, the money may go to someone else's account, and recovering it is difficult. Most exchanges will not reverse a withdrawal once it is submitted.
Another issue is selling crypto when the market price is moving quickly. Between the time you see the price and the time your sale completes, the price can change. Most exchanges show you the price you will receive before you confirm, so review that number carefully. Some exchanges also charge higher fees during times of high trading volume, so the fee you see may be higher than usual.
If you are withdrawing a large amount, the exchange may place a hold on your account while it verifies the withdrawal is legitimate. This is a security measure to prevent fraud. You may need to confirm the withdrawal through an email link or by answering security questions. Check your email carefully if your withdrawal seems to be delayed.
Frequently Asked Questions
How long does it actually take for the money to show up in my bank account?
One to three business days is typical for most exchanges and banks. If you request the withdrawal on a Friday, do not expect it until Tuesday or Wednesday at the earliest. If your bank is small or regional, add another day. You can call your bank to ask how long ACH deposits take to clear.
Can I transfer crypto directly to my bank without selling it first?
No. Banks do not accept cryptocurrency. You must sell it on an exchange first, which converts it to dollars, and then the exchange sends those dollars to your bank. There is no way to skip the sale step.
What happens if I sell crypto and the price drops before the money reaches my bank?
The amount you receive in your bank account is locked in at the moment you sell, not when the money arrives. If you sold at $45,000 and the price drops to $40,000 before the withdrawal clears, you still receive the $45,000 (minus fees). The price change does not affect the dollar amount you already sold for.
Do I have to report the sale to the IRS even if I made a small profit?
Yes. Any sale of cryptocurrency is a taxable event and must be reported on your tax return, regardless of the profit amount. Even if you made only a $50 profit, you should report it. Failing to report crypto sales can result in penalties and interest.
What if the exchange goes out of business before my withdrawal clears?
Once the withdrawal is submitted to your bank, the money is in the banking system and will reach your account regardless of what happens to the exchange. The exchange has already sent the funds through ACH, so the transfer is no longer dependent on the exchange staying open. However, if the withdrawal has not been submitted yet, contact the exchange when ready to request it.