I assume that they don’t hold the bitcoin but contract out the holding of the coins (or keys) to some 3rd party who specializes. They still make money on the sp

I assume that they don’t hold the bitcoin but contract out the holding of the coins (or keys) to some 3rd party who specializes. They still make money on the spread and the buy/sell price gouge may be even larger to cover fees of whoever actually holds the crypto. Holdings may not be 1:1 still but it should be some safe amount.