all these new places to buy bitcoins. Where is the liquidity?

[EuroTrash]

Hi, just wondering if someone can help me understand this.
After all announcements around Bitcoin 2013 conference this weekend, I seem to see new exchanges popping up like mushrooms. Take e.g. WebMoney or the new BitInstant. Where do they harvest the coins needed to provide some market depth without slippage? I mean if I can crash BitStamp/BTC-E prices with just a thousand coins, how can these new players guarantee the prices to stay stable on their exchanges that have much lower volume? Do they have some secret agreements for a partially shared orderbook with BitStamp, maybe Gox and BTC-E, maybe Ripple-alike but simpler? Or are they doing fractional reserve banking selling you bitcoins they don't have or buying them in advance with cash they don't have yet?

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[empoweoqwj]

I think you'd have to ask each one individually, as each will have a different answer.

Some will think they have enough backing to "replace" the current exchanges, and hence get volume that way. Others will serve as "meta-exchanges" where they aggregate several exchanges through API or agreement. And some might be done fractional reserve banking.

Great question though. Let's say mtgox disappeared tomorrow (not saying its going to happen but hypothetical). We'd all end up at 20 different places with much lower volume.

Its where things go from that get interesting.

[MPOE-PR]

Stop trying to centralize. The liquidity is OTC, and has always been there. If you're not cool enough to trade with the cool kids find a website that has a pretty color scheme and stick to that.