You don't have to convert it to fiat if you don't want to, plenty of people use Bitcoin as currency, that is the entire point. Users tipped each other nearly a million USD worth of it on nostr int he last two months ($950k). You can go to any major city and find place to buy/sell/spend it. Many places online accept it too, of course. The network effect is quite large. Bitcoin's market cap is larger than sweden's GDP. It moves trillions of dollars of value every year. Not people "hodling", people using it to do funds transfer.

But if you want to, you can absolutely convert it, with a single click. Those middlemen typically take a lower cut since they're doing conversion not sending/receiving/settlement which is a much risker and therefore expensive service. There is, for example, no counterparty risk if you convert somebody's BTC to their native currency, but there is if you transfer that person's money to another person or act as an intermediary. I use strike for this, strike's conversion fee is less than 1%, in many apps or exchanges, conversion is literally free because the app wants to incentivize you to store money with them and because it's just updating some row in a database.