Yes, you can cash out cryptocurrency from your Coinbase wallet. Coinbase makes it easy to convert your crypto holdings into fiat currency like US dollars that can be withdrawn to your bank account.
How to cash out from Coinbase wallet
Here are the basic steps to withdraw funds from your Coinbase wallet:
- Log into your Coinbase account and go to your wallet page.
- Click on the “Withdraw” button for the cryptocurrency you want to cash out.
- Enter the amount you want to withdraw and select the currency (USD, EUR, etc).
- Select the withdrawal method – bank account or PayPal.
- Coinbase will convert your crypto to fiat currency and send the funds to your linked bank account or PayPal account.
The process is quite straightforward. As long as you have a linked bank account, you can easily convert your crypto to cash and withdraw it.
Deposit & withdrawal limits
Coinbase imposes limits on how much crypto you can deposit or withdraw in a day/week/month. These limits depend on:
- Your account verification level – basic, intermediate or advanced.
- Your payment method.
- The age of your Coinbase account.
- Your purchasing history and trading volume.
The higher your account verification level, the higher your limits will be. Here is a table showing sample deposit/withdrawal limits for each level:
| Account Level | Daily Deposit Limit | Daily Withdrawal Limit |
|---|---|---|
| Basic | $1,000 | $1,000 |
| Intermediate | $10,000 | $10,000 |
| Advanced | $50,000 | $50,000 |
These limits reset at midnight UTC everyday. You can increase your limits by completing the account verification steps required for each level.
Withdrawal fees
Coinbase charges a fee when you withdraw funds from your wallet. This fee depends on the currency and withdrawal method:
- ACH bank transfer: Free (US only)
- Wire transfer: $10 USD flat fee
- PayPal withdrawal: 2% of amount transferred (minimum fee $0.99)
- Cryptocurrency networks: Blockchain network fees apply e.g. BTC, ETH
There are no fees for depositing crypto into your Coinbase wallet. However, there are fees for purchasing crypto via bank transfer or card payment.
Withdrawal timelines
How long withdrawals take depends on the method:
- ACH: 3-5 business days
- Wire transfer: 1-3 business days
- PayPal: Instant
- Debit card: Instant
- Cryptocurrency networks: Up to 1 hour, varies by network congestion
Coinbase aims to process withdrawals within 1 business day. However, bank transfers can take 3-5 days to reflect in your account.
Taxes on cashing out
When you sell or cash out your cryptocurrency, it is considered a taxable event by the IRS. You owe capital gains tax if you sell your crypto for more than you paid for it. Here are some key tax implications:
- Short-term gains – crypto held less than 1 year – taxed as ordinary income
- Long-term gains – crypto held over 1 year – generally taxed at lower rates
- FIFO accounting method – First In First Out, used to determine tax liability
- You receive a 1099-K form from Coinbase if you exceed $20,000 in transactions
Coinbase will fill out most of the 1099-K for you. But you are responsible for calculating capital gains and losses for tax reporting. It is advisable to speak to a tax professional when cashing out large amounts.
Should you cash out? Considerations
When deciding whether to cash out your crypto, here are some things to consider:
- Are you cashing out to take profit or cut losses?
- Do you need the money for an emergency or expenses?
- Do you still believe in the long-term potential of the asset?
- Will you owe high taxes on the cash out? Is it better to HODL?
- Are you comfortable with the volatility and risk of the crypto market?
Also weigh factors like existing debts, your financial goals, and market conditions. Don’t cash out in a panic during a dip – cash out intentionally with clear goals.
Alternatives to cashing out
Rather than cashing out completely, consider these alternative options:
- Withdraw partial amount needed and hold rest
- Exchange between cryptocurrencies (stablecoins, altcoins etc)
- Earn interest by lending your crypto holdings
- Spend crypto directly on purchases (cryptocurrency debit cards)
- Use crypto as collateral for a loan (avoid selling)
This allows you to take profit or free up cash while still maintaining crypto exposure.
Steps to cash out on Coinbase
Let’s go through the step-by-step process to withdraw funds from your Coinbase wallet:
- Login – Go to www.coinbase.com and login to your account. Two-factor authentication if enabled.
- Navigate to wallets – From the main account page, click on ‘Wallets’ to view your crypto balances.
- Choose withdrawal currency – Select the cryptocurrency you want to cash out e.g. Bitcoin, Ethereum etc.
- Click Withdraw – The ‘Withdraw’ button is available beneath your balance for each crypto.
- Enter amount/info – Type the amount to withdraw. Select currency – USD, EUR etc. Enter destination details.
- Check for fees – Review the withdrawal fees and minimums before proceeding.
- Confirm details – Carefully check the details before confirming the withdrawal.
- Check status – You can view pending withdrawals under ‘Orders’.
Once the withdrawal is processed from Coinbase, it still takes a few days for the funds to reach your linked bank account.
Troubleshooting tips
Some common issues when withdrawing from Coinbase include:
- Withdrawal blocked – verify identity or increase limits
- Wrong withdrawal network – choose compatible network
- Pending bank transfer – takes 3-5 days typically
- Missing bank account – link valid bank account
- 2FA failure – make sure 2FA code is correct
You can contact Coinbase customer support if your withdrawal is stuck or missing. Support is available 24/7.
Security tips
When moving funds out of Coinbase, be sure to follow security best practices:
- Enable 2-factor authentication
- Beware of phishing emails/fake websites
- Verify recipient address – triple check before sending
- Use a strong unique password
- Enable account alerts
- Check transaction status on Coinbase
Never share login details or sensitive information with anyone. Bookmark the legitimate Coinbase site to avoid fakes.
Conclusion
Withdrawing funds from your Coinbase wallet is straightforward – just link a bank account or PayPal, convert crypto to fiat currency, and withdraw to your account. Be mindful of withdrawal fees, limits and processing times. Consider tax implications before cashing out. Enable all security features in your Coinbase account to keep your crypto secure. With a reputable platform like Coinbase, cashing out your cryptocurrency holdings is safe and simple.
