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SS Legal Advisor
SS Legal Advisor, Advocate
Category: Law
Satisfied Customers: 1047
Experience:  Senior Caseworker at DL Solicitors
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How do cryptocurrency exchanges survive a crash for example

Customer Question

How do cryptocurrency exchanges survive a crash for example if they have cryptocurrency to sell worth 1 billion and there is a big crash and that pile of crypto is now worth 20 million for example would this not bankrupt the exchange?Do the exchange have a crypto stockpile or do they buy on demand ?
Submitted: 14 days ago.
Category: Law
Expert:  Virtual-mod replied 14 days ago.
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Expert:  Jeremy Aldermartin replied 13 days ago.

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I feel this is outside my expertise on further consideration so shall opt out

Expert:  AlinaK-admin replied 12 days ago.
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Expert:  SS Legal Advisor replied 12 days ago.
Hello,
I am an experienced legal advisor (not financial) and I am happy to answer your question.What I think you need to understand about an exchange is that it is more of a middle man than a seller. Its makes money by taking commission on facilitating the sales and purchases.They will be impacted by a crash but not mainly by the losses in crypto value but by the fall in people buying and selling crypto after a crash.Kind regards
S