How to create md5 hash via Arch Linux commandline?

Simply echo it to md5sum.

The first result will consider a newline character in the end of the string, prior to generating the hash.

$ echo P@ssword1 | md5sum
0a43c426e3d6764fe1f3f7cbb3579eba  -

Otherwise as @AFH states if you wish to not have a newline character do the following:

$ echo -n 'P@ssword1' | md5sum
d106b29303767527fc11214f1b325fb6  -

None of the answers mention that with echo -n 'password' | …, you will write your password to persistent storage, namely your history.

You can avoid this, depending on the shell, by prefixing the command with a space (test this for your shell). Read up on your shells documentation on how this is handled.

Alternatively, you can use md5sum directly, by running md5sum, typing the password and then Ctrl+D. Do not hit Enter between the password and Ctrl+D, unless you want to have include a newline in the hash.

Here is an example using openssl

echo -n 'stack overflow' | openssl md5
(stdin)= 481b8423202598ecfb233c5fa68caf68

Openssl implement several different hashing algorithms, if you need a different one some day.