Robinhood has become one of the most popular platforms for buying, selling, and storing cryptocurrencies. The commission-free investing app makes it easy for anyone to trade top cryptos like Bitcoin, Ethereum, and Dogecoin.
If you’ve invested in cryptocurrencies on Robinhood and want to take profits or cut losses, you’ll need to place sell orders. This comprehensive guide will walk you through the entire process of selling crypto on Robinhood in six key steps:
Step 1: Sign Up and Set Up Your Robinhood Account
In order to buy or sell any cryptocurrencies on Robinhood, you’ll first need to sign up and open an account. Here is how to get started:
- Downloading the app: Download the Robinhood app on your iOS or Android device. Robinhood also has a web version you can access from a desktop.
- Providing personal info: To open your account, you’ll need to provide personal details including your name, email, date of birth, and home address.
- Verifying your identity: Robinhood will require identity verification to comply with anti-money laundering regulations. You’ll need to provide your Social Security Number and take a photo of your driver’s license or passport for review.
- Enabling two-factor authentication: For enhanced account security, make sure to enable two-factor authentication in your account settings. This adds an extra layer of protection beyond just your password.
- Linking a bank account: To fund your Robinhood account, you’ll need to link an external bank account and provide the account and routing numbers. This allows you to seamlessly transfer money between Robinhood and your bank.
Once your account is open, you can start funding it with cash to purchase cryptocurrencies or receive the proceeds from crypto sales.
Step 2: Research the Crypto Markets Before Selling
Before you start placing any sell orders for your cryptocurrencies, it’s essential to do some research on current market conditions. Keeping up with crypto news, price movements, trends, and technical analysis will allow you to make informed decisions.
Here are some tips for researching the market:
- Check crypto news sites like Coindesk to stay updated on the latest news that could impact prices.
- Use Robinhood’s charts and data to analyze price history and monitor real-time prices. Look at daily, weekly, and monthly charts.
- Examine trading volumes on Robinhood and other major exchanges to gauge market momentum. High trading volumes typically reflect increased interest.
- Compare market capitalizations of cryptocurrencies to understand size and market dominance. Bitcoin has the largest market cap by far.
- Study technical indicators like RSI, moving averages, and support/resistance levels to identify potential entry and exit prices.
- Consider external factors like government regulation, adoption rates, media sentiment that could influence crypto markets.
Thorough market research will allow you to time your trades appropriately.
Step 3: Select the Cryptocurrency You Want to Sell
Robinhood supports trading of the seven largest cryptocurrencies by market cap:
- Bitcoin (BTC)
- Ethereum (ETH)
- Bitcoin Cash (BCH)
- Litecoin (LTC)
- Dogecoin (DOGE)
- Ethereum Classic (ETC)
- Bitcoin SV (BSV)
Navigate to the page for the specific crypto asset you want to sell on Robinhood. You can enter the quantity you want to sell on the trade ticket.
Before selecting a cryptocurrency to sell, review key details including:
- Your average cost basis – This shows the average price you paid per coin.
- Current market price – See the latest trading price per coin. Compare to your cost basis.
- Total equity – This reflects the total current value of your holdings in that cryptocurrency.
- Percent increase/decrease – Shows whether you have gains or losses on your holdings.
- Available quantity to sell – Check how much of that crypto you have available to trade.
Carefully review the cryptocurrency and amounts you are selling. Double check that all the details look correct before placing a sell order.
Step 4: Place Your Sell Order on Robinhood
Once you’ve decided which cryptocurrency to sell and the amount, it’s time to place the order. Robinhood offers two main types of orders:
This sells your crypto at the currently available market price. Market orders offer speed and certainty of execution, but no control over the sale price.
To place a basic market order:
- Enter the quantity of crypto you want to sell.
- Tap Preview Order to review the details.
- Tap Submit Market Order to complete the market order.
With limit orders, you manually set a minimum sale price that you’re willing to accept. The trade will only execute if the market price reaches your limit price.
To place a limit order:
- Enter the quantity of crypto to sell.
- Set your limit price (minimum sale price).
- Tap Preview Order to verify details.
- Tap Submit Limit Order to place the order.
Use limit orders when you want more control over the sale price. Market orders get filled faster but at current prices.
Step 5: Withdraw Funds from Robinhood
Once your sale goes through, the proceeds from the sale in USD will settle into your Robinhood account. You can leave the money there or withdraw it to your connected bank account.
Here is how to withdraw funds from Robinhood:
- From your Robinhood home page, tap the account icon in the bottom right.
- Select Transfers > Withdraw Funds.
- Enter the amount you want to withdraw.
- Verify your bank account details.
- Submit the withdrawal request.
The money should transfer into your bank account within 3-5 business days.
Step 6: Track the Tax Implications
Selling cryptocurrencies can trigger capital gains or losses that may impact your taxes. Every sale is a taxable event.
Short-term capital gains taxes apply if you sell crypto held for less than a year. Long-term capital gains taxes apply to holdings longer than a year. The tax rates differ based on your income.
Here are some tips for managing crypto taxes:
- Maintain detailed trading records with precise dates of trades, cost basis, and sale proceeds.
- Download tax forms from Robinhood before filing your taxes.
- Consider using crypto tax software to generate capital gains reports.
- Consult a tax professional to understand your specific crypto tax obligations.
- Set aside a portion of your sale proceeds to cover potential taxes.
With proper planning, you can optimize your cryptocurrency taxes.
Selling cryptocurrency through Robinhood is quick and straightforward thanks to the app’s intuitive interface. By following this 6-step guide, you can seamlessly sell your crypto holdings:
- Set up your Robinhood account and link a bank account.
- Research the latest market news and price movements.
- Select which cryptocurrency you want to sell.
- Place a market or limit order to sell your coins.
- Withdraw the funds from Robinhood to your bank.
- Maintain records for tax reporting.
Robinhood makes executing trades simple. But remember to always base your buy and sell decisions on sound research and analysis. With proper diligence, Robinhood can be a powerful tool to help you profit from cryptocurrency’s volatility.
- Helen is a passionate and knowledgeable writer with a keen interest in all things crypto. With a background in finance and technology, she delves into the world of cryptocurrencies, blockchain, and decentralized finance, translating complex concepts into accessible and engaging content. Helen's writing not only informs but also empowers readers to navigate the rapidly evolving landscape of digital assets. Through her work, she seeks to promote financial literacy and foster a deeper understanding of the transformative potential of blockchain technology.
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