Where do exchanges get their Bitcoin?

[shinratensei_]

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.

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.

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.

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[delliaerd]

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.

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.

[Shiroslullaby]

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.

[Juggy777]

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 💭.

[rottenfruits]

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.

[iv4n]

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.

[shinratensei_]

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.

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.

[asuryan180]

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.

[TriggerX]

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.

[ethereumhunter]

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.

[Yakamoto]

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 do believe that they have their very own mining farm so they can keep on supporting their exchange sites. So they have some other source for it, they get bitcoins from mining and sells it and they are getting some fees for buying it and not putting down the original price of bitcoin. Because most of them are putting some interest per amount of bitcoin so they can generate profit.

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.