#BinanceSquare
🔄 Trading Pairs 101: Understanding Trading Pairs in Cryptocurrency
When you first enter an exchange like Binance, Coinbase, or Bybit, you'll see something like:
BTC/USDT, ETH/BTC, SOL/ETH…
And you might wonder: what does that mean?
Welcome to trading pairs, the heart of every cryptocurrency exchange.
📘 What is a trading pair?
A trading pair represents the exchange between two different assets.
Example:
👉 The BTC/USDT pair allows you to buy Bitcoin using USDT (Tether) or sell Bitcoin for USDT.
The first asset is the one you want to buy or sell (the base asset).
The second asset is the one you use as a medium of exchange (the quote asset).
📊 Practical Example:
Assume the price of BTC/USDT = 70,000
This means that 1 BTC costs 70,000 USDT.
If you buy 0.01 BTC, you will pay 700 USDT.
If you sell 0.01 BTC, you will receive 700 USDT (minus fees).
🧩 Common Types of Pairs
Pair Type Example What it Represents
Cryptocurrency/Stablecoin BTC/USDT Exchanging BTC for a stablecoin
Cryptocurrency/Fiat BTC/USD, ETH/EUR Buying cryptocurrencies with fiat currency
Cryptocurrency/Cryptocurrency ETH/BTC Exchanging one cryptocurrency for another
📌 Why are there different pairs?
Because not all tokens have direct liquidity with fiat currencies or USDT.
Sometimes you need to make an intermediary transaction.
Example:
You want to buy a new token (XYZ) but there is no XYZ/USDT pair.
So you can do the following:
Buy ETH using USDT (ETH/USDT)
Then exchange ETH for XYZ (XYZ/ETH)