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Badges can neither be traded nor transformed into gems. They are just to display on your profile and for the exp they give you.
Some badges you get without crafting, the community badge, the games owner badge, the Steam member years badge and similar. Also sometimes you can get special badges you can only get for a short time like the Steam Sticker Badge from the Summer Sale that just ended, which you got for having all Sticker pages complete.
That page is a bit old now but it seems accurate still.
Edit. Double Ninja'd
But quick question is there any benefit lost to converting card?