A trading pairs crypto involves two digital assets, which is why traders need to understand how each one is valued. Whether you’re buying one cryptocurrency token with another or selling it for cash, the value of each asset can differ significantly across pairs. The difference in value is the reason why trading pairs can be such a useful investment tool for traders, but they can also be tricky to understand.
A key element of every pair is the base and quote currencies. The base currency is the first one listed in the pair, for example, BTC/ETH or ETH/USD. The quote currency is the second, and it’s used to describe how much of the base currency you need to buy or sell a unit of the crypto you’re interested in. For instance, if the quote currency is USD and you want to buy ETH, you’ll need to know that USD is worth 13.8 BTC.
Understanding Crypto Trading Pairs: A Beginner’s Guide
When choosing trading pairs, you should take into account the popularity and liquidity of each cryptocurrency as well as their respective trading volumes. This will have a direct impact on the amount of fees you’ll need to pay to open and close your trades.
You can find a complete list of all the available pairs on a crypto price data website like CoinMarketCap or CoinGecko. These sites usually display the pairs in order of their market capitalization, which makes it easy to find the most popular ones.