VirgoCX Cryptocurrency Exchange
- Trade SOL and 70 other cryptos
- Recurring buys & automated trading features
- Get a $20 bonus when you open a new account and deposit $100+. T&Cs apply.
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VirgoCX Cryptocurrency Exchange
Solana investors have enjoyed record price gains (from $1.60 to a peak of $2.14) since January 1, 2021, as it began to cement its status as the leading smart contract-powered alternative – and potentially even a successor to Ethereum. This can be attributed to Solana's high transaction speeds (up to 50,000 TPS) and cheap fees ($0.00025) as well as a migration of new projects and users over to the blockchain network.
Now that you've learned in our Solana series how to keep your SOL safe in a wallet, how to stake SOL and where to buy SOL, your next step might be to lock in some profits and sell some of these crypto assets for some US dollars.
While decentralised wallets like Phantom, Sollet, Exodus and Math Wallet help you to exchange SOL for other coins or tokens, you'll need to use an exchange like Binance or Coinbase to compliantly convert your assets into fiat.
You could also choose to sell your assets directly to another person for cash, but be aware that this could potentially classify you as a money service business (MSB) in the eyes of US authorities if the amounts are significant, which could lead to fines or imprisonment if you don't report it.
For the purposes of this article, we will be looking at cashing out your SOL for fiat, not other cryptocurrency, on a centralised exchange and withdrawing it to your bank account. Here's how.
There are numerous exchanges that support the trading of Solana for other cryptocurrencies and withdrawing in USD. In the United States, you can use regulated exchanges like Crypto.com, Coinbase Pro, FTX, Gate.io, Binance.US or Huobi. Other exchanges might require you to convert your coins to Bitcoin or USDT first and then to fiat.
Please note that government legislation and anti-money laundering (AML) regulations will typically require you to complete a know-your-customer (KYC) process. This includes asking for information such as your name, address and proof of ID before you can begin to sell your digital assets.
Find the right exchange to buy, sell and trade SOL by comparing their deposit methods, supported fiat currencies and fees. Select "Go to site" to sign up directly with the provider.
If you've bought and are storing your Solana coins elsewhere, you'll need to transfer them from the relevant cryptocurrency wallet to the exchange first. Locate and copy your exchange's Solana deposit address, and use it to transfer funds from your cryptocurrency wallet.
After your Solana has been confirmed to be in your cryptocurrency exchange, you can trade it for fiat currency. First, select the cryptocurrency/fiat pair of your choice, then enter the necessary details of your transaction. If your SOL/fiat pairing is not available, you will need to send the cryptocurrency to your wallet, and repeat steps 1 and 2 with a more appropriate exchange platform.
You can also choose to convert your SOL to a cryptocurrency that is part of a supported USD trading pair, for example Bitcoin, Ether or stablecoins like USDT and USDC, after which you then sell that crypto asset for fiat.
While you will incur a transaction fee in this case for the conversion of SOL to a different asset, it will likely be negligible (around 0.1% on exchanges like Binance) as it's a crypto-to-crypto transaction. This will save you the hassle of signing up on a new exchange and moving your Solana coins around.
Now that you've converted your SOL into fiat, it's best to withdraw your USD from the exchange into your bank account since exchanges can be vulnerable to hacks. If you have decided to use your new USD balance to buy other cryptocurrencies, consider moving them off to a secure non-custodial cryptocurrency wallet that gives you control of your private keys at all times.
Crypto markets and prices are notoriously volatile, as the value of an asset is usually determined by market sentiments and predictions of future value and adoption, rather than current use cases.
Therefore, you need to decide whether you acquired your SOL as an investor or a trader, and what your end goal is: to make more USD or to accumulate more crypto.
If you feel your crypto asset has a bright future ahead that can survive a temporary bear market, it might be better to just HODL it. Most of the leading cryptocurrencies periodically go through great upward price cycles that allow you to cash out at a greater profit if you're patient enough. Of course, nothing is guaranteed in the world of crypto, as this list of "dead coins'' shows.
Every crypto investor has different needs and objectives, so it's important to sell your cryptocurrency based on your circumstances.
Before selling, ask yourself these questions:
If you still decide to sell, then these questions can help you make the right decision.
The exchange you select to register and send your cryptocurrency to will also be important. You will need to consider the following when choosing a cryptocurrency exchange:
Read our crypto exchange guide for more in-depth information regarding how to decide on the best exchange for your needs and tips regarding other factors, such as the location of the exchange and how that will affect its government regulations.
Exchange platforms have a wide range of withdrawal options and will almost always have a fiat withdrawal choice. Check to see what withdrawal options are supported. Most commonly these options include the following:
There are many factors to consider when choosing the cash-out option:Fees. Exchange fees, trading fees and deposit/withdrawal fees all vary by exchange platform, and all cut into your profit or increase your loss when trading cryptocurrency. When considering a withdrawal fee, this will depend on the withdrawal method you select. Withdrawal limits. Often an exchange platform will limit your maximum or minimum amount per withdrawal transaction. This will depend on the exchange selected. It's possible these limits can be increased if you provide additional information to the exchange. Processing. Withdrawal fees can change depending on your withdrawal method. Bank transfers can take several days to be approved, while cash withdrawals are instant.
Before selling your Solana, it is crucial to analyze the market carefully and consider the optimal time for you to exit your position. It is, of course, impossible to predict the best moment to sell, but our guide to cryptocurrency technical analysis is another useful tool to help you understand and comprehend the cryptocurrency market.
The technical analysis guide will give you all of the necessary information about volume candlesticks and moving averages as well as a better explanation of how the market analysis will help predict future price action.
Of course, it's equally important to look at a project's fundamentals. For this, you can look at Solana's network adoption, transaction growth, roadmap, industry investment and use case in growing sectors like DeFi and NFT. There's nothing worse than selling too early – other than selling too late of course.
Ultimately, know that you'll most likely never buy at the bottom or sell at the top. There will always be a better and a worse time to sell your Solana,
Therefore, it might be better to periodically buy and sell SOL in batches in order to gain the benefits of dollar-cost averaging of your transactions.
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