I've been confused for a while on what happens to a particular cryptocurrency when swapped to another. I mean when a swap may be BNB to get usdt, what happens to the BNB?
The person (in case of p2p) or exchange you’re swapping with takes your coin and give you the one which you require to swap to. In this process, no new coins are created or consumed. It's similar to trade by barter. We compare costs and then exchange them since I have what you want and you have what I want. They may be a time when a coin you wish to swap with is not available in an exchange, but since they have listed it, they will never run out of it when their users require it.
But another user can always swap another coin to BTC at anytime and receive the BTC, so where is the BTC coming from since it already in circulation (held by other holders)?
The platform that you're using to do this trade is doing it for profit, so keep in mind that they'll definitely have a lot of it in stock for their customers to always buy from and swap with their currencies. They can always top up when there is a high demand for one that can lead to its exhaustion, allowing them to continue providing their services.