#TradingPairs101

If you’ve ever tried trading, you’ve come across the term “crypto pair.” Essentially, when you trade a crypto pair, you're exchanging one cryptocurrency for another. For example, the pair "BTC/ETH" represents trading Bitcoin (BTC) for Ethereum (ETH).

Let’s unpack the importance of choosing the right pair and the factors influencing pair dynamics.

Why Do You Need Crypto Pairs?

First, why trade crypto pairs when you can buy and sell crypto with fiat? Here are a few reasons:

Diversification: Trading pairs allow you to diversify your portfolio within the crypto ecosystem without needing to convert constantly back to fiat. This can be more efficient and potentially less costly than repeated fiat conversions.

Market Speculation: Crypto pairs provide unique opportunities for market speculation by exploiting price discrepancies and relative value shifts between different cryptocurrencies.

Arbitrage Opportunities: Arbitrage, the simultaneous purchase and sale of an asset to profit from a price difference, can be more readily identified and exploited within the interconnected network of crypto pairs.

Access to Emerging Assets: Many new cryptocurrencies may have limited trading pairs with fiat initially. Trading pairs provide access to these assets and the potential for early investment gains.

Popular Crypto Pairs

There’s at least one pair for virtually every cryptocurrency. However, the most common pairs you’ll come across are Bitcoin pairs like BTC/USD, BTC/ETH, and BTC/USDT. Ethereum pairs like ETH/USD, ETH/BTC, and ETH/USDT and stablecoin pairs like USDT/USD, USDC/USD, and BUSD/USD are also widespread.