Where do exchanges get their Bitcoin?

[CoinCarrie]

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.

[1714759967]

1714759967

[1714759967]

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[spazzdla]

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?   

[bestluck]

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.

[useless4]

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

[odolvlobo]

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.

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.

[Patatas]

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.

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.

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.

[raphma]

if initially a condition rises where a demand is actually way above the exchange wallet's coins ?

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

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.

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.
[/quote]

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.

[Kprawn]

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. 

[partysaurus]

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

[MingLee]

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.

[extrabyte]

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.

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%.

[Jeremycoin]

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.

[NUFCrichard]

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!

[CoinCarrie]

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

[NUFCrichard]

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.

[wintermeasures]

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 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

[Camnates]

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 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.

[mindrust]

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.

[jtipt]

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 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.

[amacar2]

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.