Where comes and how exchanges gets the bitcoins that I buy? - page 2.

mk4

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Quote from: hosseinimr93 on February 11, 2022, 05:24:23 PM

I feel you didn't get JeromeTash's reply.

When you bitcoin on an exchange, you are actually buy bitcoin from other users, not the exchange itself.
You deposit fiat and place a buy order. Someone else deposits bitcoin and sell it to you. After that, you will be able to withdraw bitcoin and the other user will be able to withdraw fiat.

So, for every satoshi added to a user's balance, one satoshi is deducted from another user's balance.

tldr for OP just for more clarity; it's pretty much like eBay — but instead of selling random stuff, everyone's buying and selling crypto. Exchanges really don't sell anything, they just charge an exchange fee for people buying and selling coins to each other. Just like eBay!

TheEconomists

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Quote from: akewin on February 11, 2022, 04:48:01 PM

Hello! I am so sorry if this is in the wrong topic, or if this question is so dumb, but, this caught me:

when I buy some Bitcoin/cripto from one exchange (like Binance, CoinBase...), how does they use my fiat money to get my BTC's? From where they get it?

Didn't found any related doubt, so, if you know how this works, would be awesome to share your answer here!

Thanks!

You are not alone in that exchange and as you have faith currency looking for who to exchange with so also there are people there to who have one crypto currency or the other looking for who they would sell to. Exchange has now becomes you guys meeting point and that was why the exchange have to charge you for creating such an avenue for both of you that transact your business.

24Kt

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Quote from: Bitcoin_Arena on February 11, 2022, 05:50:41 PM

Quote from: akewin on February 11, 2022, 04:59:35 PM

But just this alone doesn't create a cycle that may lead to a necessity of having more bitcoins in the wallets, thinking that the demand may increase higher than the holdings of the wallets? If so, where they get those new coins from and how do they pay for it?

In other words: if I buy BTC from the exchange, where does the exchange buy/gets the BTC that are available or may be needed?

The Bitcoin is always available in most cases, especially with big exchanges like Binance. When there is an increase in demand, this means a rise in Bitcoin price and with the rise in Bitcoin price, it means there will be more willing sellers at higher prices for profits.

If it's a small exchange with very small trading volume. They simply let you know of the maximum amount of Bitcoin they have available for sale. This is common mostly with instant exchangers.

We can simply put it this way - if there are buyers, there are sellers as well. So this is just a cycle and the supply and demand factor will determine the current price level. The OP should not be confused where the exchanges are getting their bitcoin because there also sellers of btc to their exchange. You will worry if there are only buyers, if that happens, I am certain the price of btc will skyrocket as the supply is limited.

Bitcoin_Arena

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Quote from: akewin on February 11, 2022, 04:59:35 PM

But just this alone doesn't create a cycle that may lead to a necessity of having more bitcoins in the wallets, thinking that the demand may increase higher than the holdings of the wallets? If so, where they get those new coins from and how do they pay for it?

In other words: if I buy BTC from the exchange, where does the exchange buy/gets the BTC that are available or may be needed?

The Bitcoin is always available in most cases, especially with big exchanges like Binance. When there is an increase in demand, this means a rise in Bitcoin price and with the rise in Bitcoin price, it means there will be more willing sellers at higher prices for profits.

If it's a small exchange with very small trading volume. They simply let you know of the maximum amount of Bitcoin they have available for sale. This is common mostly with instant exchangers.

akewin

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Quote from: hosseinimr93 on February 11, 2022, 05:24:23 PM

Quote from: akewin on February 11, 2022, 04:59:35 PM

In other words: if I buy BTC from the exchange, where does the exchange buy/gets the BTC that are available or may be needed?

I feel you didn't get JeromeTash's reply.

When you bitcoin on an exchange, you are actually buy bitcoin from other users, not the exchange itself.
You deposit fiat and place a buy order. Someone else deposits bitcoin and sell it to you. After that, you will be able to withdraw bitcoin and the other user will be able to withdraw fiat.

So, for every satoshi added to a user's balance, one satoshi is deducted from another user's balance.

Oh! Grateful, my doubts got clarified by complete now. Thanks for the reply

hosseinimr93

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Quote from: akewin on February 11, 2022, 04:59:35 PM

In other words: if I buy BTC from the exchange, where does the exchange buy/gets the BTC that are available or may be needed?

I feel you didn't get JeromeTash's reply.

When you buy bitcoin on an exchange, you actually buy bitcoin from other users, not the exchange itself.
You deposit fiat and place a buy order. Someone else deposits bitcoin and sell it to you. After that, you will be able to withdraw bitcoin and the other user will be able to withdraw fiat.

So, for every satoshi added to a user's balance, one satoshi is deducted from another user's balance.

akewin

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Quote from: JeromeTash on February 11, 2022, 04:53:22 PM

From the exchange's hot or cold wallets. Remember, you are not the only person participating in the trades through the exchange. While you are trying to buy the Bitcoin, There are some people out there who are also trying to sell off their Bitcoins for cash. So the Bitcoins they sell may temporarily be keep in hot or cold wallets waiting for you to make your purchase order so that they get transferred to you.

Oh, got it, thank you so much for the reply.

But just this alone doesn't create a cycle that may lead to a necessity of having more bitcoins in the wallets, thinking that the demand may increase higher than the holdings of the wallets? If so, where they get those new coins from and how do they pay for it?

In other words: if I buy BTC from the exchange, where does the exchange buy/gets the BTC that are available or may be needed?

JeromeTash

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From the exchange's hot or cold wallets. Remember, you are not the only person participating in the trades through the exchange. While you are trying to buy the Bitcoin, There are some people out there who are also trying to sell off their Bitcoins for cash. So the Bitcoins they sell may temporarily be keep in hot or cold wallets waiting for you to make your purchase order so that they get transferred to you.

akewin

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Merit: 4

Hello! I am so sorry if this is in the wrong topic, or if this question is so dumb, but, this caught me:

when I buy some Bitcoin/cripto from one exchange (like Binance, CoinBase...), how does they use my fiat money to get my BTC's? From where they get it?

Didn't found any related doubt, so, if you know how this works, would be awesome to share your answer here!

Thanks!

Topic: Where comes and how exchanges gets the bitcoins that I buy? - page 2. (Read 307 times)