#TradingPairs101 🔁 TradingPairs101: What are trading pairs and how do they work?

If you are new to crypto, the term “trading pair” can be confusing. But it is the foundation of any trade. Let’s break it down.

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🔹 What is a trading pair?

A trading pair is two assets between which value can be exchanged.

Example: BTC/USDT

• BTC — base currency (what you are buying or selling)

• USDT — quote currency (what you are paying with)

👉 If the price of the BTC/USDT pair = 70,000, it means that 1 BTC = 70,000 USDT

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🔸 Why are pairs needed?

1. To exchange one asset for another

2. To evaluate the value of an asset in a convenient currency

3. To build trading strategies: arbitrage, pairs, hedge

⚠️ It is important to remember:

• Not all assets are traded with each other. Sometimes you need to go through a bridge:

➡️ SHIB → USDT → BTC

• Liquidity can vary significantly between pairs.

BTC/USDT is more liquid than BTC/XYZ.

• Prices for the same assets can differ in different pairs. This creates opportunities for arbitrage.