How to store your FIAT properly off the exchanges?

[nitrothegiant]

I started playing with crypto in May of this year, I've only made a few trades at this point and thankfully the experience has been positive overall (Apart from Coinbase, that place blows).

One BIG no no that I'm working on fixing now is that everything has been stored on the exchanges, so I'm in the process of organizing my wallet situation.

My question is, lets say you theoretically liquidate your entire crypto portfolio after a massive jump in the market and exchange for FIAT to wait for the next correction. Do you exchange for USDT and hold that like you would your other coins?

I ask this because when you deposit FIAT onto the exchange from your bank account, its just there in USD and obviously I don't want to leave my money sitting in the exchanges. I know its a really noob question but just wanted to be sure.

OR

If my assumption about the above is right, is there a better way? Because if you want to have FIAT on hand AND keep it safe, you have to deposit into the exchange > trade for USDT > store it > trade it back for a coin when you decide to buy in again. Thats a lot of transaction fees doing it this way.

Thanks!

[Bitfort]

Actually I think storing fiat on exchange is safer than storing cryptos.

IMO hackers aim to stealing cryptos mainly.
In case of hack the stolen crypto is transafed out and as txs are ireversible there is no chance for exchnage to get it back. Contrary the fiat which can be tracked and/or canceled by authorities.
Moreover I believe any proper exchange dealing with fiats has to be somehow insured (for fiat losses ).

So to your question I would keep stored fiat rather than converting to USDT.

[ikilledcobain]

That's a good question. Generally, when I'm selling a market bump, I'll usually put everything in btc and hold it there. I guess if you're looking to take it all and put it into fiat, you would be left with your dilemma.

I probably wouldn't mind keeping fiat in a very reputable exchange, but for the most part I'm going to go ahead and make sure that money is in my bank account. Yes, you're going to lose money in the transaction fees but at the same time, I don't really feel like it's my money until I can access it from my bank. If the bump is large enough, it should hopefully cover the fees and then some.

Heck, call me old fashioned, but when I cash out, I like to put a little in physical gold and silver too. I don't think I trust fiat too much regardless of where it's being held, lol.

[gentlemand]

I would never trust a significant amount to USDT. It's not USD, there is no guarantee it's going to be worth anything tomorrow.

If I was a relatively active trader I couldn't afford to remove my USD from an exchange. It takes days to move around.

Assuming you're in the right area exchanges like Gemini have banking charters so your funds are protected by full bank insurance up to a certain amount even if they themselves go tits up. That's about as safe as it gets.

Actually I think storing fiat on exchange is safer than storing cryptos.

IMO hackers aim to stealing cryptos mainly.
In case of hack the stolen crypto is transafed out and as txs are ireversible there is no chance for exchnage to get it back. Contrary the fiat which can be tracked and/or canceled by authorities.
Moreover I believe any proper exchange dealing with fiats has to be somehow insured (for fiat losses ).

So to your question I would keep stored fiat rather than converting to USDT.

You're forgetting one rather large thing which is the most common form of hack is your account details being compromised. The hacker then uses your stored fiat to buy all the crypto they want and it's all gone forever.

The only time your fiat is safe in a hack is when the exchange itself is breached which is a much, much rarer occurrence.

You need to 2FA everything including email and make sure your 2FA isn't via mobile phone as that's far too easy to hijack.

[Bitfort]

I would never trust a significant amount to USDT. It's not USD, there is no guarantee it's going to be worth anything tomorrow.

If I was a relatively active trader I couldn't afford to remove my USD from an exchange. It takes days to move around.

Assuming you're in the right area exchanges like Gemini have banking charters so your funds are protected by full bank insurance up to a certain amount even if they themselves go tits up. That's about as safe as it gets.

Actually I think storing fiat on exchange is safer than storing cryptos.

IMO hackers aim to stealing cryptos mainly.
In case of hack the stolen crypto is transafed out and as txs are ireversible there is no chance for exchnage to get it back. Contrary the fiat which can be tracked and/or canceled by authorities.
Moreover I believe any proper exchange dealing with fiats has to be somehow insured (for fiat losses ).

So to your question I would keep stored fiat rather than converting to USDT.

You're forgetting one rather large thing which is the most common form of hack is your account details being compromised. The hacker then uses your stored fiat to buy all the crypto they want and it's all gone forever.

The only time your fiat is safe in a hack is when the exchange itself is breached which is a much, much rarer occurrence.

You need to 2FA everything including email and make sure your 2FA isn't via mobile phone as that's far too easy to hijack.

Sure ... we can define a lot ways to hack ... hacking certain "wallet implementation" (more or less what I was talking about), hacking individual account ( in which case no matter what curency you stored .. it's all gone), hacked complete exchange security (also no matter at all .... it's gone as well).

I still consider my point valid because if you have a fiat stored in you are scared of 2 of those 3 things I mentioned ... thus it's safer.

Nevertheless non of us answered OPs question so I would sum it like this.
It's up to you to decide whether undergo the risk of losing it or sacrifice some time and fees for transferring your funds to safer place.

[nitrothegiant]

Thanks to everyone for being so informative, cheers!

[CrypticGambit]

Just sell btc or eth on echanges that allow fiat currencies and you should be good