How do bitcoin exchanges make money?

[Bitcoinn_Kingg]

Im aware they make money off fees, but if everyone starts withdrawing 100% gains etc, where is that money coming from? If people are putting in 20k and cashing out 40k etc, where is all the money coming from to pay them?

[HabBear]

Bitcoin exchanges make money off the spread the create between the buy orders and the sell orders. If you want to buy bitcoin with them the price will be slightly higher than if you want to sell bitcoin at the same time. That difference is called the spread and it's the "fee" that exchanges create and keep to serve as compensation for putting a buyer and seller together.

Exchanges make the market, it's been working like this for (literally) hundreds of years, thousands probably. Not for bitcoin of course but for anything being traded in a market.

A secondary source of income could be from actual fees charged to convert to buy Bitcoin from fiat, if they run a wallet that offers such an option.

[pooya87]

Im aware they make money off fees, but if everyone starts withdrawing 100% gains etc, where is that money coming from? If people are putting in 20k and cashing out 40k etc, where is all the money coming from to pay them?

in trading two people are going against each other. if you put in 20K and take out 40K someone else is putting in 40K and taking out 20K.
and none of this matters the exchange don't care if you make 20K or lose it. they take a percentage of it nonetheless. for example if the fees are 0.2% they will take 160 (80 from you and 80 from the other person). and that is how they make money.

- sometimes they do other stuff with the money they have too. like investing it in something...

[btctousd81]

they charge fees for each transaction and that how they make money.
for buy and sell they charge some % , its their cut.

If people are putting in 20k and cashing out 40k etc, where is all the money coming from to pay them?

people put 20k and cashing out 40k means they bought at low and sold at high, in short someone bought his coins for 40k , so thats where the 40k came from.
there are many people doing buy and sell trades.

if there are any other methods for exchanges to make money, i would like to know more .

[Ayiranorea]

I'm not that aware about the different ways of profit making by the exchange websites. Probably in every transaction they get a fee and in particular every exchange websites have a capital volume. The difference with that too provides a profit.

[Sadlife]

Bitcoin exchanges make their profit in compensating in the buy and sell orders when you want to buy bitcoin with them the buy price is slightly higher compared to the sell price.

The second source is when about to withdraw your bitcoin's is you must need to pay their withdrawal fee that will not cost much only about 10-15%, imagine if you have thousands of users you make big profit. For web exchanges like this im sure they have some capital in order for them to start their business.

[Bitcoinn_Kingg]

Ok great, like i said im aware of the fees, but wasnt think about it properly i guess. Im looking to start using Gemini. I live in the US and this seems to be the best option from all the research ive done. Im very paranoid though about these exchanges paying you out when its time to withdraw, especially large sums. Has anyone withdrew more than 50k cash+ from gemini without any problems? Im looking to deposit about 30k.

[iqlimasyadiqa]

Im aware they make money off fees, but if everyone starts withdrawing 100% gains etc, where is that money coming from? If people are putting in 20k and cashing out 40k etc, where is all the money coming from to pay them?

who do any trading on an exchange course is a traders, they are buying and selling of coin they have. So an exchange will not interfere. They usually take advantage of the withdraw activity coin in the exchange. So any transaction made from the exchange to outside will be charged a predetermined fee.

[raven7886]

If people are putting in 20k and cashing out 40k etc, where is all the money coming from to pay them?

If you are making some 20k from trading, it means some other trader (or traders ) are totally losing 20k. It is like player vs player gambling. Someone is winning the money of someone is losing. Exchanges are doing the work of matching you both buyer and seller.

So, there will be no actual profits nor losses for exchanges because of a trader is making or losing money from his trades. The only concern for exchanges is how many trades are taking place so that they can make money from those trades as fees for trading.

[Willitivity]

Bitcoin exchanges make money basically from the fees they charge.
When you're buying and selling, you pay a particular percentage as trasnction fee.
Also, when you wish to withdraw your funds you're​ also charged​, this covers network fee but they also have a profit from that.

[Yanisumin]

Im aware they make money off fees, but if everyone starts withdrawing 100% gains etc, where is that money coming from? If people are putting in 20k and cashing out 40k etc, where is all the money coming from to pay them?

Just like television, like advertisements, exchanges are charging fees ( sometimes so high ) that's how they are earning their money. Imagine a little fee but a thousands of transactions, it is still a big amount. If you're talking about how they are earning some coins that will be exchanged and how they are coping up in the pace of changing cryptocurrencies, then I think they are directly purchasing from the developers and miners.

[mart_got]

Listen, very common use cases are fees on 3 different ways:
- withdrawals
- transaction (golden treasure)
- deposits (rarely)

Last one is actually makes money. I had seldom seen when crypto exhcange takes fee on deposit as it out of their interests. Pretty obvious why. However to increase the amount of transaction you might allow API Source link: http://merehead.com/blog/how-build-cryptocurrency-exchange-software/

I hope that makes sense. Either way the core in volume!

[mart_got]

Yes, me too. Pretty interesting to check what supported cryptocurrencies and if you do the design (frontend) or have already templates?
I found this article about build crypto exchnage software - http://merehead.com/blog/how-build-cryptocurrency-exchange-software/. A lot of things such as security, trading engine, admin system etc. and they say design is very important right now as still many users want to trade but the gap is too big

[alyssa85]

Trading fees and withdrawal fees. Most trading fees are around 0.2% of the trade. So to find out how much they are making, just apply that fee to the trading volume and see just how much money the exchanges are making.

Some charge a fee for withdrawals on top.

[maeusi]

Im aware they make money off fees, but if everyone starts withdrawing 100% gains etc, where is that money coming from? If people are putting in 20k and cashing out 40k etc, where is all the money coming from to pay them?

On legit exchangers you only can gain, what other loose buy/sell like already posted. To get a better plastic view just have a look on yobit to cryptocurrencies, that are trad3d with one satoshi. You will see many sell orders but no buy orders. So it is impossible, that 100% of users would sell Bitcoin. If no one would buy, you couldn't sell.
So exchangers earn with fees and additional services like coin listings, bets, margin lending and so on.

[arranka]

Nobody mentioned the list of coins?
exchanges charge to list a currency
Does anyone know how much the exchanges charge for listing coins?
for example poloniex binance bittrex bitfinex etc

[arranka]

they say that cryptodia charges 50 btc for listing a coin

this is true?