Where do exchanges get their Bitcoin?

[Senor.Bla]

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.

[Hirose UK]

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.

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.

[Omegasun]

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.

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

[awesome31312]

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)

[davis196]

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.

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?

[prtty2gal2]

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.

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.

[JeffBrad12]

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.

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.

[mobnepal]

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.

[nealvanessa990]

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.

[Ryan Dugan]

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.

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.

[sana54210]

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.

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.

[red4slash]

maybe you can try vip.bitcoin.co.id 

[dharkmadder]

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

[xuan87]

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

[Camnates]

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.

[European Central Bank]

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.

[BitcoinPanther]

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.

[Camnates]

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.

[dothebeats]

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.

[Betwrong]

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