10 sats \ 0 replies \ @TwoLargePizzas 15 Oct 2023 \ on: How do exchanges acquire bitcoin? bitcoin
In theory, there's a buyer for every seller.
In practice, it's a bit more complicated. Long term investors often forget about the day traders, swing traders, trading bots, arbitrage traders, market makers, liquidity providers and so on.
It's these people trading at the margin that ultimately determine the short term price. For people DCAing a little bit of money each paycheck there's likely some day trader on the other side happy to fill your order.
On the other hand, when a big guy like Saylor comes in and makes an offer for millions of dollars worth in an OTC trade, that's when things get more complicated. That Bitcoin has to come from somewhere and if the OTC desk doesn't have the Bitcoin on hand they have to go out to the market and acquire it. That's when the price rips up because they have to find sellers willing to part with their Bitcoin.