The basics

A cryptocurrency exchange is a platform where you can buy, sell, and convert cryptocurrencies — using traditional dollars (via bank transfer or debit card) or trading one coin for another.

Think of it like a stock brokerage, but for crypto. You create an account, connect a bank, deposit dollars, and use them to buy Bitcoin. You can also go the other direction: receive Bitcoin to your exchange account and convert it to dollars, which then get transferred to your bank.

For merchants, exchanges serve two key purposes: cashing out (converting received crypto to dollars) and stocking up (buying Bitcoin to make change or test your setup).

Hodl says
The golden rule of exchanges: don't keep funds on them longer than you need to. Exchanges are for converting — not for storing. Move funds to a self-custody wallet you control as soon as you're done with the exchange. "Not your keys, not your coins" applies here.

Custodial vs. non-custodial exchanges

Most exchanges are custodial — they hold your Bitcoin on your behalf, the same way a bank holds your dollars. Your Coinbase balance is a promise from Coinbase, backed by their custodied funds. If Coinbase is hacked, frozen, or goes bankrupt (as FTX did in 2022), your funds could be at risk.

Non-custodial exchanges (also called DEXes — decentralized exchanges) let you trade directly from your own wallet without an intermediary. More secure, but more complex to use. For most new merchants, starting with a reputable custodial exchange is fine — just move funds out promptly.

The exchanges worth knowing about

Coinbase
Best for beginners
The largest US exchange by users. Publicly traded (NASDAQ: COIN), heavily regulated, and easy to use. Slightly higher fees than competitors. Coinbase.com is custodial; Coinbase Wallet (the separate app) is non-custodial. Good first choice for most people.
Strike
Best for Bitcoin + low fees
Bitcoin-focused app built on the Lightning Network. Excellent for buying Bitcoin with minimal fees, and for sending/receiving Bitcoin payments instantly. Not a full multi-coin exchange — it does one thing very well.
River
Best for long-term Bitcoin holders
Bitcoin-only, US-regulated, highly trusted in the Bitcoin community. Known for low fees on recurring purchases and strong security practices. No frills — just a clean, trustworthy way to buy and hold Bitcoin.
Kraken
Best for variety + advanced traders
One of the oldest and most trusted exchanges. Wide range of currencies, competitive fees, available in most US states. Good choice if you need to handle multiple cryptocurrencies beyond Bitcoin.
Gemini
Strong compliance focus
Founded by the Winklevoss brothers. Known for strong regulatory compliance and clean interface. Offers Gemini Earn (interest on holdings) and a credit card with crypto rewards. Popular with compliance-focused businesses.

How to cash out: sending from your wallet to an exchange

  1. Create an account on your chosen exchange and complete identity verification (KYC).
  2. Find your exchange's deposit address for the asset you want to convert (e.g., Bitcoin).
  3. From your merchant wallet, send the amount you want to cash out to that deposit address.
  4. Once the funds arrive on the exchange (may take 10–60 minutes for on-chain Bitcoin, seconds over Lightning), sell them for dollars.
  5. Initiate a withdrawal to your business bank account — typically 1–3 business days via ACH.
⚡ Want instant cash-out without the manual steps?

OrangeTill's auto-convert feature (on Growth and Annual plans) can automatically convert received crypto to dollars and transfer to your bank account. You accept Bitcoin; OrangeTill handles the conversion. See the auto-convert guide for details.

Exchange fees to watch for

Do I need an exchange to accept Bitcoin payments? ▼
No — you just need a wallet. OrangeTill routes payments directly to your wallet; no exchange is involved. An exchange only becomes relevant if you want to convert received crypto to dollars. If you're comfortable holding Bitcoin, you may not need an exchange at all.
What happened to FTX? Should I be worried about exchanges? ▼
FTX collapsed in November 2022 due to fraud — the company used customer funds for trading, lied about it, and went bankrupt. Customer funds were frozen and partially lost. The lesson: exchanges are counterparty risk. US-regulated exchanges (Coinbase, Kraken, Gemini) are subject to oversight that makes outright fraud much harder — but the best protection is simply not leaving significant funds on any exchange longer than necessary.
Does my exchange report my transactions to the IRS? ▼
Yes. US-based exchanges are required to report transactions to the IRS and issue 1099 forms for accounts that meet certain thresholds. Starting in 2025, crypto brokers (including exchanges) are required to report customer sales to the IRS, similar to stock brokerages. Assume your exchange activity is fully visible to tax authorities and report accordingly.

You handle the customers. OrangeTill handles the crypto.

No exchange required to get started — just a wallet and an OrangeTill account. Cashing out is optional.

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