One of the risk if you invest in cryptocurrency is Exiting the Markets, There may come a time when you want to sell your crypto assets and hold your wealth in fiat currency instead. Unfortunately, the crypto market’s “off ramps” are troublesome for a lot of investors. Yes, the situation is improving, but it’s far from ideal. There are a few factors which contribute to the complexity:
Many crypto exchanges only allow withdrawals in USD. Some also allow GBP, EUR, and JPY, but the choice is minimal.
Exchanges frequently require high minimum withdrawals with withdrawing to fiat.
Lots of exchanges that support fiat withdrawals only accept a few highly mainstream cryptocurrencies. For example, Coinbase—one of the most popular ways to buy crypto in Europe and North America—only supports Bitcoin, Ether, Litecoin, and Bitcoin Cash.
In order to withdraw fiat money, you typically need to go through an utterly tedious verification process that can take months.
Some exchanges have been accused of withholding funds for vague and nondescript reasons. Lawyers sometimes have to get involved.
So, what does that mean for you?
At best, you might be exposed to multiple exchange rates to withdraw your funds into your domestic bank account (for example, IOTA > Bitcoin > USD > GBP), thus introducing uncertainty into the value of your assets and increasing risk. At worst, your crypto assets might not be available if/when you need them.