How to Convert Bitcoin to Ethereum

Bitcoin and Ethereum run on separate blockchains, so converting BTC to ETH requires either a centralized exchange, a decentralized swap service, or wrapped token intermediaries. The simplest path for most people is a centralized exchange with a BTC/ETH trading pair.

Before You Start

• A centralized exchange account (Coinbase, Binance, Kraken) with identity verification completed
• Bitcoin in your exchange account or in a wallet you can send from
• An Ethereum wallet address to withdraw your ETH after converting

Converting BTC to ETH is a taxable event in most jurisdictions. You owe capital gains tax on any increase in your Bitcoin's value since you acquired it. Keep records of the conversion date, amounts, and the fair market value of both assets. Consult a tax professional for your specific situation.

How to Convert BTC to ETH on a Centralized Exchange

1. Deposit Bitcoin to your exchange. If your BTC is in a personal wallet, send it to your exchange's Bitcoin deposit address and wait for 3-6 confirmations (30-60 minutes).
2. Navigate to the BTC/ETH trading pair. On Coinbase, go to Trade and search for BTC/ETH. On Binance, find it under Spot Markets.
3. Choose a limit order for large amounts. Market orders execute instantly but can suffer slippage on amounts over $10,000. Limit orders let you set your maximum price and wait for a fill.
4. For smaller amounts, use a market order. Enter the BTC amount you want to convert and confirm. The trade executes in seconds.
5. Review the quoted fee and exchange rate. Most exchanges charge 0.1%-0.5% per trade. The fee is shown before you confirm.
6. Execute the trade. Confirm the order. Your ETH balance updates immediately.
7. Withdraw ETH to your personal wallet. Go to ETH, click Withdraw, enter your Ethereum wallet address, select the Ethereum network (or a Layer 2 for lower fees), and confirm.
8. Record the transaction for taxes. Note the date, BTC amount sold, ETH amount received, and the USD value at conversion. You will need this at tax time.

Fees and Timing

Centralized exchanges are the cheapest option for most conversion sizes. DEXs and swap services offer non-custodial alternatives but cost significantly more due to Ethereum gas fees. For conversions under $5,000, gas fees on DEXs can eat 2-10% of your total.

FAQ

Can I convert BTC to ETH without an exchange account?

Yes, using instant swap services like Changelly or ChangeNOW, which do not require KYC for small amounts. You send BTC to their address and receive ETH at yours. The convenience costs 1-3% in fees, making them more expensive than exchanges but simpler for one-off conversions.

How long does the entire process take?

If your BTC is already on an exchange: minutes. If depositing from an external wallet, add 30-60 minutes for Bitcoin confirmations. The trade itself executes in seconds. ETH withdrawal takes 2-15 minutes depending on the network.

Do I owe taxes on a BTC to ETH conversion?

In most countries (US, UK, Canada, Australia), yes. Converting one cryptocurrency to another is treated as selling the first asset. You owe capital gains tax on any appreciation since you acquired the BTC. The holding period (short-term vs long-term) affects the rate. Use crypto tax software like Koinly or CoinTracker to automate record-keeping.

This guide is for educational purposes only and does not constitute financial, investment, or tax advice. Cryptocurrency markets are volatile, and converting between assets carries risk. Tax rules vary by jurisdiction. Consult qualified professionals before making decisions. Spark is not affiliated with any exchange mentioned.