As more and more people join the community (assuming some are new to the crypto space), I will post some basic things about crypto from time to time, like this one.
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Trading pairs are combinations of two different cryptocurrencies or a cryptocurrency and a fiat currency that are traded against each other on cryptocurrency exchanges. They serve as the fundamental building blocks of these exchanges, enabling the execution of trades and facilitating liquidity and price discovery.
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The base currency in a trading pair is what you are looking to buy or sell, while the quote currency is what you use to make the trade. The price of the pair indicates how much of the quoted currency is needed to purchase one unit of the base currency.
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Traders and investors should be aware of the different kinds of pairs available on an exchange platform, as not all cryptocurrencies can be directly exchanged for one another, which may necessitate a two-step trade involving a more commonly traded intermediary asset. Understanding pairs is also vital for executing more complex trading strategies, such as arbitrage, which involves taking advantage of price differences between pairs across different exchanges.
Some examples of the most commonly used trading pairs:
- BTC / USDT
- ETH / USDT
- ETH / BTC
Source: https://koinly.io/crypto-glossary/trading-pair/ Show Less
