How much cash do I need to run a crypto exchange. Coinbase has gotten multiples of 100s millions in FIAT VC funding. So they can cover withdraws.
But what if you are a small startup ( maybe ICO ) who wants to provide exchange services. If lots of people start withdrawing FIAT from you ... you can't keep up, unless you are taking as much FIAT deposits as they are being withdrawn ... any thoughts ?
It would depend upon the market cap at which you aim on. If you are looking for daily volume at about $1k. So this way you must have a Fiat liquidity of at least $1K. Moreover it also depends upon the total amount of BTC you aim to hold at the beginning. Generally new startups even with a lot of buzz dont get investments more than 70-100 BTC in total unless you cater any big shark. So if you aim to hold such amount of BTC atleast 7-8% of the amount. Generally no more than 7-8% are going to ask for their money immediately.