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The downside to this method is that you would have to withdraw funds to the account in your bank if you want to sell Bitcoins for fiat money. If that exchange is experiencing problems with the banks it deals with or any liquidity issues, it might take an extravagant amount of time to get your funds. BTC-e and Mt. Gox are two exchanges that are notorious for such issues.

Therefore, it is imperative that you extensively research on different exchanges before using one to commit your funds. You could also make use of cryptocurrency exchange for changing Bitcoins for any other cryptocurrency. Though, it is not a commonly practiced tactic, but some Bitcoin traders exercise it.

While using any exchange, you would be required to pay some fee for using that exchange’s services. BTC-e has a flat fee of 0.2 percent. In addition to that, there is a limit on the volume of money that you can store on a certain exchange. This is why experts advise that you don’t store all your money (Bitcoins) on an exchange. It is best to store additional funds on any of your personal devices instead of keeping it on any exchange that has a risk of getting hacked.