Bitcoin Forum

Two that come to mind are Coinbase & Circle.  I did a quick google search, possibly wrong terms.  The information I got was useless.  I am sure this has been discussed.  If there is a good article/link on this it would be appreciated.

huh people that sign up with the intent to sell, I would guess early buyers and miners. 

Or is this not the question you are asking?   

the exchanges get their money from the fees of the transactions happen at there, while we get the exchange of our money from those people who sell their coins.

not only from that, when the exchange starts or when they need bitcoin they buy it from others

i think thats the only way new exchanges can start because they usually have no miners to have their own coins

Coinbase and Circle get bitcoins from people that sell bitcoins to them. They may also buy off exchanges or have private deals with miners or large holders.

The term exchange is confusing. Coinbase and Circle are not exchanges, in that they are not marketplaces where people buy and sell. I suppose you could call them exchangers. They buy and sell bitcoins.

I'm very uncertain while answering your query,infact I had the same doubts to which I could not get a convincing answer.
To all the people replying ,they get the coins from the people depositing in the exchange wallets.What if initially a condition rises where a demand is actually way above the exchange wallet's coins ? How does exchange deal with that ?

There are no boundaries set by any exchanges I reckon.Moreover most of the people don't really save up coins in the exchange wallets.What we're looking here is the wallet acting as an middle men but coinbase doesn't operate like that.To me ,its still a mystery.

No,but if I check a particular transaction,its the same amount of money being deducted from my balance which is directly paid to the network.Not even 1 satoshi is kept by the exchanges.I might be wrong though.

That's simple.. they wont pay...
it's not a rocket science, they get money from fee's, each transaction have fee's(buy/sell,withdraw). they SHOULD have enough money to pay all their customers even if all of them try to withdraw at the same time.

BUT, that doesnt mean they have it on their wallet. And if that happens, they will need to solve(lending some bitcoins for example) or they will just shutdown and run away :P


No,but if I check a particular transaction,its the same amount of money being deducted from my balance which is directly paid to the network.Not even 1 satoshi is kept by the exchanges.I might be wrong though.
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sorry but yes, you are. Well... at least in general. withdraw fee might be used to pay the network(depending on the amount, they will not use it all) but they have fees to buy and sell too. poloniex for example uses 0.15/0.25 for every transaction you do there.

I guess in the beginning some people have to invest a little of their own money to get started and to keep the wheels spinning. Once the exchange is up and running, they just generate income from the

transactions being done on the exchange and then buy Bitcoins from miners and other exchanges directly. Anyone know if any of these services have their own Mining farms too? I know a while back, a

company started as a mining operations and then changed their business model into something else, when mining were no longer profitable for them. Just cannot remember which company it was.  ::)

Seems like the most logical solution :) wonder how close you were to being correct :)

Most exchanges either start with some Bitcoin they bought directly from miners or other exchanges, and then they eventually buy some from users or whatever as their exchange grows and they become self-sufficient for their Bitcoin.

If it is an exchange with direct peer-to-peer exchanges, though, then the exchange relies on the consumers and producers to procure their own Bitcoin.

To open an exchange you needs lots of bitcoin, i think that most of the popular/biggest exchanges are early adopters of bitcoin. So they have a good amount of bitcoin, otherwise they have invested a large amount of money buying bitcoin in the past and also another source is the profit from every exchange that is made there which is at least from 0.2% to 1%.

First, they already have a bitcoin before exchanger itself is made. Maybe they mine it from the miner or even buy it from someone.
After the exchanger was made, then they got their Bitcoin from the fees of their customer.

Surely an exchange is just a trading platform provided to allow buyers to buy from sellers who want to sell...
They don't need any Bitcoins themselves, they just need to have enough sellers so that the buyers can always buy.

If someone wants to buy a very large amount that can't be satisfied by the sellers, then an unfulfilled order will be left over.  Or the price gets pushed up until it is fulfilled.  Due to arbitrage between exchanges, increases in price in one exchange will either be brought back down, or other exchanges will follow higher.

If I understood the question correctly!

Yes, that was the question.  Everyone seems to be in agreement too.  I also agree as all of the replies make sense - ty :)

I said something different to what all of the other post above me did. They all implied that an exchange needs to be an early adopter or hve lots of bitcoins, I said that they don't, they are merely a platform.

It's the same as Betfair compared to a Bookmaker, Betfair is an exchange and only acts as a platform, a bookmaker has to have lots of funds to cover losses.

I think exchanger obtain bitcoin from fee, transaction fee and the withdraw fee. we know if they are millions of users then it becomes enormous profits, not to mention some of the exchangers often plays a coin prices. Thank you

I agree with that. Also some exchanges claim they are hacked, so that they can keep the customer's money.

From their users? Exchanges make their profit out of the purchases which their users make. They get fees like %0.1 or %0.2 generally.

Btc-e takes %0.2 of whatever you buy/sell. There was 9720378USD volume for btc/usd trading today. So, btc-e.com made nearly 19.5k$ just from that one today.

I think they mainly get it from miners and early buyers who sell as the price rises. There is also normal buyers-sellers who use the exchange and keep them stocked.

exchanger oviously gives only platform to buy and sell or trade bitcoin show there is no point for them to buy bitcoin from any other source. This question could fit for bitok like site which have certain margin in price between selling and buying price for profit, and they get it from exchanger with api whenever someone buy bitcoin or sell them with api on exchanger when someone willing to sell.

well everyone get them from mining, especially from those first early adopter and when the reward was higher(50 per block) there were many coins in circulation in a shorter time frame

from there you get the current spread

Few were those who were lucky to get in before, and few are getting huge investments raised for their ideas.
Everyone has a different story, so for the exchange part too. And you are giving them fee for using their services, and each trade has a nice 0.2% average fee, so don't think it won't be much for them, as lots of transactions take place per day.

 Where do exchanges get their Bitcoin?

Aside from the transaction fee which is deposit and withdrawal fee they get Bitcoins.
Maybe they also get their Bitcoins in every coin that want to be list in the exchange ;)

Whenever an exchange list a new Altcoin they get paid by the Coin owner to list the coin on the exchange. Secondly for every trade they deduct the trading fee. The difference between buying and selling is also earned by the exchanges.

I heard they were a division of BitStamp and that's a place where they get their coins.

I do not think you trade against the exchange. The bid/offer difference is not earned by the exchanges.

Hi, I am from the Philippines and I am using a coins.ph. Our Local currency which is Philippines Peso is converted into bitcoins through COins.ph and after that I deposit it to different trading sites. Well the negative thing about it is that there is a high spread between the buying and selling amount of Coins.ph. So I only buy bitcoins when the value of bitcoins if very low. In that way, I can avoid the loss.

The exchanger get bitcoin from traders and miners but before make exchanger we must have big capital for make markets. And it will make markets are alive because there are transaction. And usualy markets get bitcoin are from fees trading, deposit and withdrawal.

Most of the exchange get their bitcoins most of the time in every transactions of the traders who sign up in their exchange sites.
and everytime they buy and withdraw their bitcoins there is always charge fee. Thats how they earned bitcoins as far as I know. :)

For some exchanges, the exchange itself does not make the market. The traders make the market themselves.

all type of exchange get their coins from us they charge us fees for not only in withdrawl but also at every order or trades we do. we get coins from other users but exchangers make profit even if we don't

Normally new exchanges get their Bitcoins in the form of capital investment made by themselves, and they purchase bitcoins themselves. Once they earn enough fees from the exchanges they attain equilibrium in the amount earned and the invested amount. Other ways to earn at a later stage would be from ads and various other forms of trading.

I'm sure that the owners of the company had to buildup a large bitcoin balance before they could start selling. They probably borrowed funds for the business. Now they can sell and buy since they have a lot of customers.

you start with an initial investment for your starting money just like any other business. the starting money is usually either from them buying from others, even from other exchanges or asking people to come and become partners by investing in them.

then you start advertising and over time as people come to your exchange and did business there you gather the fees.

That is how they make their bread and butter... from those withdrawal fees.
Anybody know how much bitfinex was charging in these fees to their customers?
I know it depends on the amount of the withdraws but still what was the percentage? ???
I bet it was very high or why else would their customers not want to withdraw their funds in their accounts on a daily basis?  ::)

I use the Poloniex, the fee they charge is 0.0001 or 0.06 US dollar. So if you withdraw $2000, it is reasonable fee.

I was always wondering how much exactly a coin creator must pay to Yobit for example for their coin to be listed. I think it's around $200 but Im' not sure.

i think that exchanges dont mine it in my opinion they just buy some coins from others for the beginning and that is basically it

i think exchangers buying it when the price just seems so profitable,and i think how exchangers could get profit is like when people doing trading,buying at the low price and selling it in the higher price,thing that make it different,exchangers can't sell the bitcoin immediately as traders does

I think exchange does not have to trade to get the bitcoin. It can just get the bitcoin from the trading fees.

an exchange that trades would be not very smart. because nobody can say where the price will go and so there would be the possibility of losing money.
to start an exchange you need some money anyway. a part of this you will invest in a couple of bitcoins to start with, but here is how exchanges usually work.
the bring a seller and a buyer together and just exchange the goods and take a cut. so they can never make a bad deal and the profits just have to be bigger then your cost.

I think they got it from many ways. before the did this exchanges business, they need financial capital that probably they got from the seller or from their job incomes, etc.

so when they have this first financial capital, they can open exchange service. so they exchange crypto to fiat or the opposite.

They have a lot of capital on establing an exchange site, We can notice that the buy and sell price they offer is much higher on the normal price of the coin and they also deducting for every transaction we made. I think in that way exchange get there money to continue running their site

They make money off every buy/sell order you have. Also, most of them are restarts of exit scammers, so they have lots of starter cash out of thin air.

Also, the ads that most of them bomb your computer with helps too.


Go ahead, click on the link to that exchange below, I'm daring you to now


(Jokes)

People who register accounts at these exchanges deposit bitcoins in order to

buy altcoins.This is how they get bitcoins,i guess.

If all the exchanges buy btc from Coinbase and Circle,then how Coinbase and Circle get their bitcoins?

Simple. They will get from miners. All the mining companies need to use bitcoins for the purpose of needing funds to maintain their mining farm, electricity cost would be one of biggest expense for them. Other than this Coinbase will be able to use/circulate wallet holders bitcoin similar to exchanges.

And the exchange getting the bitcoin for free from the miners?I don't think so, but I believe if the exchanger is already having some funds at starting their exchange site and later we will get more amount if there are a developer is wanna for sign in their coin into the exchange site and they also get their bitcoin from giving a tax for their users.

Talking about coinbase, they have trading platform attached so i think when you try to buy bitcoin from coinbase than they will take sell orders from exchange platform and add fee to that price and give you tentetive price per bitcoin. So basically they don't need to hold bitcoin themselves as in exchange platform there will be always sell order, what they earn is those fee above market price.

Question is where do exchanges get their Bitcoin?
Well all bitcoin come from miners and all bitcoin distributed to people using exchanges.Some bitcoin goes to cold storage and most of the bitcoin are selling using exchanges.If you told about how they got profited then most of the exchanges got profit transaction fees.Some exchanges also invest on bitcoin and got profited.

I wonder why you never found an answer....

They mine their own and get the rest from buying peoples bitcoin that is why they are called an exchange so they can exchange. That really was a stupid question I mean honestly.

Why should miners give free bitcoins to exchange. Everybody is doing their business then how come a freebie will come to play here. Miners will need to sell some of their block rewards time to time for managing their mining activities. Then obviously they will hit exchange for the need of running costs for the mining farm.

maybe you can try vip.bitcoin.co.id  ;D ;D

There is no definitive source since they aren't disclosing that publicly but mostly it's from people selling BTC to them, i.e they take the BTC for a lower price and sell at the little bit higher price they usually use.. I doubt they buy it from other exchanges :)

as i know, usually the exchanger get their bitcoin from transaction fee, exchanger usually charge percentage amount when you do transaction, but for coinbase they got their profit from selling and purchasing bitcoin by user

The transaction fee is the main income stream for the exchanges. They also lend out the digital currencies.

what about the coinbases and xapos that pay your fees for you? that's gotta add up to a pretty substantial amount per day. that's another dribble of bitcoin they have to find from somewhere.

Exchanges get their bitcoin from users and investors.  Some exchanges offers share token and sold it to the market.  Next is users are paying for fees everytime the made a trading transaction.  There is also this withdraw transaction where they charge you a certain percentage of you withdrawal.

I think it is mainly from the transactioin fees. Some times, in the Poloniex, there are huge volume, so there is lot of fee.

Exchanges like Coinbase and Circle get their bitcoin capital by buying it off from mining companies or some pretty rich bagholders and sell it off in the market with some premiums on it. Also, they also buy it off of traders who uses their platform to trade or sell whatever they have. As for profits, they got it from trading fees, withdrawal fees (which are very low amounts) and also, investors giving them money to help improve their services.

Thanks for this short and in the same time very useful explanation.

OP, you might also find some useful information going by the link below:

https://en.bitcoin.it/wiki/Currency_exchange

On exchanges there are a lot of people who are exchanging their fiat to bitcoin and some are exchanging their bitcoin to fiat so these are the people who provide bitcoins to these exchanges when we buy bitcoins from an exchange then we do not buy them from the exchange but we buy them from the people who are selling these bitcoins on that exchange.

Another way they can do it also is by borrowing from financial institution  if they are able to prove to them they the business they are going into will pay off. Once a bank understands that there is going to be high return on investment, they will not hesitate to give them financial aid.

? They get their bitcoins from customers that need cash. It's really not that hard to follow. Where do they get cash from. Customers that sell bitcoins. How do they make money? There is a spread of the buy vs sell price.

Well i dont know how big his their portfolio at bitcoin, but they collect fees, and sure they have some contract to buy a number of bitcoins weekly, for lets say 10-20% off the price market, soo they wont fail of funds.

Most of the coins come from people who want to sell and buy.These exchanges charge fee for letting their users use their platform.Exchanges also charge fee from coin developers for listing their coins

I think that they have earned those bitcoin from users but also I believe that someone on their team is one of the early adopters.

They probably have invested a lot in the early stages of bitcoin or and are big investors and have bought bitcoin when the price was cheaper.

Because they are an exchange they get profit from exchanges that make users and they usually take fees from 0.2% up to 1%.

Obviously they start with a few bitcons and in time earn more by charging their traders fees on trade they made. From there that stack of bitcoin keeps growing and most of th eexchagnes invest in better security, more usability and even hire more developer to add more coins and/or support employee to improve their support.

Fee for selling and buying and enlisting new coins to their exchange.For example purchasing bitcoin with credit/debit card,coinbase charge up to  3.99% service fee.Circle has different fee structure.I have seen some exchanges even have earnings from ads

They have their fees for each and every transactions and for each and every trade so with these fees the exchanges can easily earn a bigger amount of money and they can survive their exchange with that income.

Not much exchanges have ads on their websites but only those exchanges have ads which will be in the early stage and which will not have much coins to trade and which are unable to get any higher fees from the transactions because of their early stage.

Aside from ads and transaction fee. They get major of their profit on listing fee of a coin. Listing fee cost a lot of bitcoin. C-cex exchange site doesn't have ads and their transaction fee is very minimal so i think that they will not able to continue their site for small fee from transaction.

yeah I think of a fee per trade that users do, of course if you ever make trades and all purchases and sales of course you get a fee right ?

I think there is a lot of exchange that makes a profit, the first trading fee, the fee withdrawals, and sales profits or buyer of course ?

The more trader on exchanges,the more bitcoin income the exchanges has. From every trading transaction they charge .2 percent i think,though very small but with the big volume being traded they got a handsome profit aside from the withdrawal fees.Also,they got bitcoins to start the business sourced from miners and other seller.

the exchange just wanna for making the transaction for buying the bitcoin looks like a directly like you're buying in the exchange for directly. but there is the another opinion are he don't know if the people are wanna for buying a bitcoin from the exchange site is not for the directly, because if you're already sending a request to the exchange site(not through the trading place), the exchange are making a margin trading for your order in their trading place and asking for the seller of bitcoin for selling the bitcoin into your order.

Bitcoin currency exchanges work in a manner similar to banks. One first deposits amounts of money in the currencies supported by the exchange, to his own account in the exchange, uses these balances to trade with other users of the exchange and then withdraws that money. Unlike over-the-counter transactions, there is no risk of losing money due to people not fulfilling their part of the deal, as long as the exchange itself does not commit fraud or withhold money.

Exchanging is done by placing "buy" or "sell" orders, which the exchange system software then matches with each other. "Buy" orders (or "bids") are offers to buy bitcoins in exchange for another currency at a maximum price-per-bitcoin which is set by the offerer. "Sell" orders (or "asks") are offers to sell bitcoins at a minimum price-per-bitcoin. If the bid price of a buy order is higher than the ask price of a sell order, an exchange can be performed and either the bid order, the sell order or both can be removed from the "order book". Thus, at any given time, there is a price above which there are no more buy orders and a slightly higher price below which there are no more sell orders.

Communication with the Bitcoin currency exchanges is commonly done using a standard web browser, over a secure SSL connection.

The payment methods that are most commonly accepted and used by Bitcoin currency exchanges are:

Bitcoin transfers
Liberty Reserve
Bank wires
Credit cards
Currencies that can be exchanged with Bitcoins in an automated way include:

US Dollars
Euros
Japanese Yen
Russian Rubles
Pound Sterling
Pecunix Gold

I heard some altcoin exchange sites like bittrex and Poloniex charge from 2 btc for listing a coin in the exchange. this is also a way of exchanges to get bitcoin. they  charge bitcoin to add a new coin.. and they earn from all exchanging and trading also..

well, coinbase is not a altcoin exchange. so it's all business depends on bitcoin selling.

For you to put up a site or an exchange if you asked, you need lots of money/bitcoin. And where do they get this bitcoin?  From the investors of the the sites. And then they do a rolling for their bitcoin to grow.

And they get money/bitcoin from those who deposits and sell their respective coins and that's what we call transaction fees.

to me the main source from where the exchanges get their money is from the transaction fee, may be they also have invested their bitcoins in different  places,

They get bitcoin from traders. They keep bitcoin stored and when they get out of stock they simply buy from other exchange sites or from bulk traders. Sometimes they also bitcoin it's out of stock or similar message. They acquire bitcoin mostly from other sites because they have deal from previous itself.

From the start, those bitcoins were mined. And maybe there were no exchanger right after bitcoin was launched. People had to do P2P I guess and that's how exchangers got they bitcoins. The possible ways of obtaining bitcoins on the start were mining and buying it directly from other people. I guess that's how they got their coins and then from that, their exchange site was launched. They would have invested a lot of money in bitcoins first before they get to open their exchange site.

Why those exchanger need bitcoin or have to buy it because they are just like marketplace where vendor sales their items and marketplace get their cuts on sales.

Likewise when some seller sells their coin to buyer in trading platform actually it was sellers bitcoin which goes to buyer and trading platform just take fee usually 0.2% of amount traded, so why should they need to buy bitcoin to buy/sell to users.

Yobit got a 20k satoshis fees each withdrawal you make so I think they are getting profit from that. Plus they are also getting a 2% each time you do an exchange from bitcoin to another one. So from that, they could pile up a lot of bitcoin and maybe invest it in a different way.

But why about some site or wallet ar not trying for charging a small fee for their member today? like xapo he never charging their member with the another fee except for trying charging for giving fees for the miners get a confirmation for their transaction and how their source? about the ads income are not balancing for their daily spend.

Most common way of exchanger det their profit is from transaction fee, for coinbase they got it from buying and selling bitcoin, for xapo i think they got it from the advertising or affiliation from their faucet game

Is there a minimum number of bitcoin required for one to start an exchange business? Or is it up to the exchange how much they can put up as a start up capital. Maybe what they did was buy in bulk or were owners when the price was still very low and when the price started to rise, they deemed it profitable to start an exchange business. Just my thoughts, though.

Yes ! True that. The exchanges came after bitcoin since the exchanges were there for bitcoin so bitcoin had to have been first or there would be no reason for the exchanges to exist.

Starting  exchanger sites  is no  joke  because  you would really needs  thousands of bitcoins  to start on. I dont  have  any  idea on where those  bitcins  came from  but  one thing  is on  my  mind that those   bitcoins are their personal possesions and they tend  to build  exchange sites because  these are good  investments too.

Just like any other business, exchange is another business. They have their initial investment, but they are getting profits from the brokerage percentage they charge from every trade. So this is the basic return the exchange owners get.

Also from their earning, if they want to exchange it to bitcoin, they can simply do it from their own exchange system. which is not a very big deal in any ways.

Exchanges when established needs capital and they buy volumes of bitcoin. But later on they dont need to buy bitcoin they just earn it from the transaction fees and other fees they charged during trading. And also they charged the developers of any coin with some amount before they could enter in their site. So exchange is like a market that charges the vendors.

Most of the exchanges platform get their bitcoin to all users who sign up/register to their exchange sites to trade their coins through in every transaction charge fees that there gonna make whether they are going to buy a coins or withdraw their coins.

At first , I think new exchange sites get their bitcoin from their own pocket. Until developers try to put their coin into your site. That the start of earning of your new exchange the more coin and the bigger the coin the more profit from your site will enter. I think that how it works

i think exchange get their money from the transaction fee and may be they have their own currency and my be also invested their money in bitcoin or some alt coints. and there they may be receiving their money.

I think exchanges got their bitcoins by buying them unless they are one of those pioneer miners. They should've bought their bitcoins from a miner personally because there isn't a single exchange at the start of bitcoins. I think most exchanges out there are quite new so I think most of them did buy from a miner and didn't mine themselves.

Yes that's something right. Because I also see every transaction that is in the exchange would certainly give you tax or fee for those who want to invest or trade. The world is all of these things have to be paid for the hard work you though at first you only have the energy, creativity, and innovation is good then it will give a great advantage to you if do good and perfect. now it is a world in which indonesia will have many websites or applications simplify something

Be sure even exchanges taking a fee with bitcoin they cant process all the cashouts, their users does request, taking that into consideration they buy some bitcoins from miners i do believe, they buy a big ammount and has a discount.

Not necessarily their personal bitcoin because they can start an exchange site with small amount of bitcoin also after that people or traders will put in their bitcoin to sell and sell by using it as a platform. The exchangers mostly not necessarily to have many bitcoins but can act as a mediators to ease the exchange or trade of bitcoin between the buyers and sellers from which they benefit by charging some transaction fees.

They probably buy the initial capital from somewhere like how we do when we are willing to start a business investing bitcoins in it, and when they are done with that and they started their exchange, they just earn bitcoins from the fees of transactions and trades, like in yobit they charge you 0.2% from every trade you make, and also they charge some fees on withdrawals as well, so that is how they earn their bitcoins.

They are big bosses, they have been in the bitcoin industry for a long time or maybe since the beginning of the bitcoin and have invest in bitcoin when the price was really cheap and they hold them and have re-invested them to build good exchanges.

yeah exchange sites get revenue from trading fees that users do, but is it possible exchange sites get paid when a altcoin included in the list of their trading sites?

Liqui are already giving any example for us about starting the exchange site in this day and i think until this time it's not spending over thousand btc just for building your own exchange site and especially if you ever think about for providing iou market methods in your exchange and that's will cut your time for gaining more popularity for your exchange site.

Yes I think so, the Bitcoin from fees of transaction and and trade is seems small, but if so mnay people do yransaction the exchange site will get realy big profit. I think in the first launch of the exchange site, the Developer need to prepare the financial capital. then if the customer do transaction and get profit from fee, they can increase their financial to fulfil buy order. That is my oppinion, I also think that probably the customer of exchange can buy bitcoin if only other customer sell their bitcoin, this reason is most logic.

I would also assume that the bigger sites have contracts to buy Bitcoin from some of the large mining pools/ companies at an agreed-upon rate.
Similar to the way airlines buy jet fuel at an agreed amount, even if the price of oil goes up or down, they have a set cost for a certain volume of product.

They get from sellers and buyers, fees. They also would be having a huge initial investment. Plus they would be earning from adverts. This is what I 💭.

A majority of them get their BTC's from users selling to them, They offer it in 2 ways "i.e buying and selling", I guess it's the same BTC but they just add there commission to the price, I don't think there is a specific way to get their BTC's other than from the users selling.

Exchange site is platform for trading, people that join buy or sell different coins. Exchange site have obligation too keep coins on platform safe and secure. They collect fees for trading, and they collect some fees for withdraw. More trading more coins exchange site collect. Simply as that, exchange site doesn't need so much bitcoins, they need to pay attention on other things more. Most important is to attract people to trade on their site. In case security is not good same thing like with bitfinex can happen.

I can be told you for took one example about the exchange site like bittrex and every a new sign of the coin are sue for paying 3 btc with them. and this is also running in the another place for donating some of the coins for paying the exchange sites.

They get it from miners,people who mine then sell them and that's where the exchanges take place and buy the BTC.That's how the whole system works really,it's a loop which is continuing forever and is established.

I'm guessing that majority of their bitcoin come from traders like us + their transaction fee. All the transaction fee add up from traders and it adds up to a huge amount in total.

i think the exchanges get their bitcoin is from the members which is trading in their sites, although the amount is really small but if this is multiplied by thousand member and its continued day by day, then the exchanges can have many bitcoin in the end of the month and this can be a good way to use the bitcoin for another purpose.

A majority of exchanges more than likely start with some capital to begin with, but they likely don't have their own farms running and just buy from existing miners. Cheaper that way.

Once volume shows up, then the exchange can chill and not worry about buying anything.