I'm about to give some rather unexpected advice:

Under some circumstances, it is best to leave Bitcoin on an exchange

...

I'm seeing a lot of newbies who have bought Bitcoin in the last year on a NO-WITHDRAWAL service like Paypal or Robinhood.

They learn about "not your keys, not your coins" and then they find out they can't withdraw.

...

Others are jumping with this advice:

Sell it, get dollars, move the dollars to a "proper" exchange and buy Bitcoin you can withdraw.

Here's why this might be terrible advice:

In the US and many other countries, this will trigger a so-called "taxable event", which will make you responsible for capital gains taxes. Worse, if you held for less than a year, you are subject to SHORT TERM capital gains taxes, which are taxed as ordinary income (!)

You could suddenly find yourself owing from 10 to 37% in the amount "gained" since you bought it. If you've already bought Bitcoin with the USD, you might have to sell it to pay the taxes. Which would then trigger ANOTHER short-term capital gains taxable event.

As the author of the slogan "not your keys, not your coins", I feel I need to warn people to be pragmatic. Don't create a massive and unexpected tax bill for yourself for a point of principle.

Let it sit for a year and learn the lesson. Buy/sell somewhere else in the mean time

You should always be the one choosing the time of any taxable event and doing say in the most tax-advantageous way. Don't force a tax bill or worse have a tax bill force a sale and another tax bill.

I am not an accountant and I cannot give tax advice. I am speaking only of my personal experience in a single jurisdiction. But those offering the "sell and move" advice are not accountants either and I think they're wrong, dangerously so.

Dare I say: DYOR

...and also get a qualified and licensed accountant, financial advisor, or tax advisor.

Every rule has exceptions. It's incredibly important to understand and practice the principles of financial sovereignty and independence.

But... no rule should be followed to the point of compounding a small mistake with a much worse mistake.

The best way to avoid this nasty trap is to:

- Earn bitcoin and self-custody
or
- Buy bitcoin, withdraw and self-custody

But if you didn't start there, take a moment and some professional advice to think about next steps.