How to Cash Out and Protect Your Crypto Gains

How to Cash Out and Protect Your Crypto Gains

How to protect your crypto investments and put them to good use, with or without cashing out to fiat.

By Katya Michaels

5 min read

Whether you invested in ETH when it was first launched in 2015, have tokens from a 2017-18 airdrop/ICO, or only got into crypto recently, it is likely that you have seen some gains in your portfolio.

This is great! Now what? Crypto veterans may advise to HODL, but what if you need cash in hand right now? Or, tired of the crypto rollercoaster, you want to secure your gains and prevent your portfolio from losing value?

If you want to put crypto towards your real-life financial needs, now and in the future, read on for the ways that your crypto gains can be protected and put to good use, with or without cashing out to fiat.

Swap tokens for ETH

If you’ve been holding some tokens but are done with them for now, you can convert them into something of more enduring value. On Ethereum, the fastest and easiest approach is to swap the ERC20 tokens for ETH.

Keep in mind that not all tokens are worth anything. They may gain value in the future as the project develops, or they may never get off the ground. You can check current token price on Coinmarketcap, and Ethereum block explorers like Etherscan and EthVM. However, due to factors that can influence crypto trading (especially on decentralized exchanges), don’t rely exclusively on dollar values, but rather be aware of the amount of ETH you are expecting to get for a certain amount of tokens.

Remember that you need to pay gas in ETH for any transaction on the Ethereum blockchain, so before you can move tokens, you need to buy ETH for your wallet. Gas fees can change quickly and significantly depending on Ethereum network conditions. For your convenience, MEW will caculate gas automatically and show you the expected transaction fee before you send, but you can also check the Etherscan gas tracker for the most current recommended gas prices.

When you’re ready to swap tokens for ETH, you can do it right in MEW wallet app (iOS or Android), or on MEW web. If your token is not available for swapping in MEW, you will need to research which exchange supports your token. Then, you would need to make an account on that exchange, send the tokens to the appropriate token address (found in your exchange account dashboard), and, if you choose, send the received ETH back to your preferred Ethereum wallet.

Get BTC exposure on Ethereum

Bitcoin is the oldest cryptocurrency and still the strongest performer of the crypto market. Its value is undeniable, and if you feel that your portfolio shouldn’t be missing out on that value, you can get BTC exposure without leaving your Ethereum wallet. One way to do that is to swap your tokens or ETH for wrapped BTC tokens.

Wrapped BTC tokens are pegged to the price of Bitcoin, so you can be sure that their value will remain stable relative to BTC. In fact, it’s just like holding Bitcoin, but with the added benefit of having the option to use those assets in Ethereum DApps and DeFi (decentralized finance) to generate passive income.

Another way to put your Bitcoin on Ethereum is to use the Bitcoin Bridge in MEW wallet app. With this tool, you can move any BTC that you already have to the Ethereum blockchain by minting the renBTC token. Once you have renBTC in your Ethereum wallet, you can swap it to any other Ethereum asset, convert it to stablecoins, or move back to Bitcoin any time.

Protect value of crypto with USD stablecoins

Speaking of stablecoins: perhaps you’d rather see your crypto value secured in USD, instead of another cryptocurrency? You can do that without exiting crypto by swapping your ETH or tokens for a USD stablecoin like DAI, USDT, or USDC.

What keeps these ‘stablecoins’ stable? They are pegged to the value of the US dollar, which means they are designed to hover as close as possible to $1.00. If/when you decide to cash out to fiat, you can be sure of receiving the dollar value of your stablecoins, 1-to-1, even if the price of other cryptocurrencies drops relative to the US dollar.

To trade your ETH or other tokens for stablecoins, go to the Swap page in MEW web or MEW wallet app. Stablecoins are a great way to hedge for crypto volatility, but of course please do your own research and look into the risks and benefits of any asset before making an investment.

Use crypto to earn rewards in DeFi and Staking

Before cashing out of crypto, you may want to consider the opportunities presented by DeFi and staking. Putting your assets to work in decentralized finance offers unique benefits compared to traditional markets. First of all, you are the only one in control of your assets. No one is making decisions for you, no one can move your assets without your knowledge, and no one can freeze your account or block you from withdrawing your gains.

Second, there are no intermediaries or barriers to entry – all you need is a device connected to the internet. There is no credit check for taking out a loan or investing in any project of your choice. You can manage your assets any time, from anywhere, without relying on working hours or access to a centralized service. By keeping your assets on Ethereum, you are making them available for use with DeFi protocols like MakerDAO and Aave integrated in MEW web, the many staking opportunities on MEW web and MEW wallet app, and thousands of other projects through the MEW DApp Browser in MEW wallet Android.

DeFi is a reimagined global financial system, rebuilt according to the principles of decentralization: unhindered access and freedom from third parties. Staking helps secure decentralized global financial networks while allowing you to earn rewards. Whether you are interested in seeing returns that are, still, unmatched in traditional finance, or want to be an early investor into the future of global finance, DeFi and staking may be for you. Again, please do your own extensive research before making any investments and never invest more than you are prepared to lose.

Get cash for your crypto

While there are many ways to secure your gains without leaving crypto, sometimes what you really need is cash in hand. Fortunately, this is also easy to do, as long as you are ok with giving your personal information to a centralized platform. MEW allows you to sell your crypto directly to a bank account using our MoonPay integration, both through MEW web and MEW wallet app for iOS or Android. Keep in mind that you will need to provide some details verifying your identity and bank account.

If selling crypto for fiat via MoonPay is not available in your location, you’ll have to do the research to see if any crypto exchanges support cashing out into your national currency. Wherever you are, the sale of crypto may qualify as a taxable event, so make sure to consult your financial adviser for the most up-to-date information.

Even if you cash out completely, we still suggest keeping your wallet information secure in case you decide to get back into crypto again, and we’ll be here for you when you do!

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