21 February 2022
Occasionally, the investment landscape is engulfed by a new commodity or instrument. There is usually a lot of hype and very quickly a number of platforms or broker sites are established. Cryptocurrencies have not been any different. Whilst it took a long time for cryptocurrencies to gain serious traction, the markets have exploded in recent years.
One of the reasons that cryptocurrencies gained acceptance so slowly was possibly the lack of a mechanism to dispose of the assets. Whilst coins were being mined and buyers were taking the plunge, there were very few avenues for changing back from crypto to fiat currencies.
The first known crypto to fiat sale took place in October 2009 when 5,050 BTC were sold for $5.02 and paid through PayPal. Although digital currency exchanges proliferated over the ensuing years, these were mostly for exchanging or purchasing digital currencies. The first real fully functional crypto to fiat exchange may have been Mt. Gox which was launched in July 2010.
Of course, as with any investment, gains are always just theoretical until you can turn the asset back into a mainstream currency via a crypto to fiat trade. This works pretty much the same way as selling stocks or property - you need to find a buyer willing to buy your asset at your asking price.
Given all the hype around cryptocurrencies, there are more than enough buyers that will snap up a good offer. It's wise to keep in mind, though, that buyers will always be bargain hunting. However, unless you need the cash urgently, hold out to get your price. It may be a little scary at first because cryptocurrency prices can move quite sharply at times.
The actual crypto to fiat exchange process involves a few steps. Firstly, you need to register with an exchange or broker. In some jurisdictions this may involve identification and anti-money laundering measures. Thereafter, you deposit your crypto coins and follow the prompts to process the sale. Finally, you need to withdraw the fiat funds and transfer them to your bank account.
Along with all the players that have seized the cryptocurrency opportunity, a few new industry terms have emerged. New technology usually gives rise to new terms that are necessary to identify or describe unique new functions or characteristics.
With cryptocurrency trading, “off-ramp” and “on-ramp” are among those new terms. These refer to mechanisms through which you can enter or exit the cryptocurrency market. On and off ramps provide the interface that allows fiat to crypto and crypto to fiat exchanges to take place seamlessly. There are several specifics to look for in deciding on the best off-ramp:
Picking sides between Over the Counter (OTC) brokers and the traditional exchanges is not very easy. Choosing a vehicle for crypto to fiat deals is even more difficult as the options are a little more limited. Ultimately, the choice depends on the requirements of the individual investor.
OTC is generally suited to larger investors. The deals are typically bespoke and closed by a mediator bringing together a specific buyer and a specific seller. For crypto to fiat exchanges, liquidity is the lifeblood. Whilst traditional exchanges may cater for the smaller players, the higher end of the market will favor the peer-to-peer deals offered by the OTC market.
In contrast, the traditional exchanges are typically purely digital, and trades are automated based on certain preset parameters. Closing a deal on an exchange depends on there being simultaneously a buyer and seller with overlapping price expectations.
There are several established names in the crypto trading space. When choosing an exchange, you should consider the same factors as we discussed in relation to choosing an off-ramp. We take a brief look at a few of the best-known exchanges that also offer crypto to fiat deals.
Built on blockchain technology, Nexinter is Nexthash's state of the art cryptocurrency exchange. Pair this with the bespoke OTC desk, and you have the ultimate in trading flexibility. With multiple pairs, a hackproof payment gateway and a choice of payment methods, Nexthash is your best bet for crypto to fiat trading.