Simplified Trading Pair
Step 1
☄️Initially, the base currency of BTC, ETH, or LTC that you acquire will be expressed in your local currency. This is simple since you will know the worth of the coins you are purchasing with your local currency.
🛠️ For example, if Bitcoin's current price is USD $20,000 and you intend to purchase USD $1,000 of Bitcoin, you would acquire 0.05 BTC for your USD $1,000. Should the price of a Bitcoin rise by 50% to USD $30,000 per unit, your BTC will also have appreciated by 50%, thus making your 0.05 BTC worth an impressive USD $1,500. You would make a profit of USD $500 if you sold all your BTC and withdrew your investment.
Step 2
☄️This step is more complex; understanding the trading pair ratio when purchasing altcoins with BTC (or ETH/LTC) as your base currency. Because altcoins cannot be purchased directly from Stage 1 exchanges, their prices are not listed in your local currency.
🛠️ This is an illustration, In this illustration, we will examine the ticker Monero (XMR) / Bitcoin (BTC) or just XMRBTC. To put it another way, I'm utilizing BTC to purchase XMR. The value of a Monero is expressed in BTC instead of USD. Its present price of 0.025 indicates that it requires 0.025 BTC to purchase 1 XMR. This “price” represents a ratio of BTC's value in comparison to XMR's value (BTC was $14,800 and XMR was $370, which gives a ratio of 0.025).
Assessing the Worth of Your Coins in USD
🍭 After using your 0.025 BTC to purchase 1 XMR, you keep an eye on the USD value of your XMR. This indicates assessing your XMR solely in USD value, simplifying the process of calculating your profits. Numerous applications and resources enable you to achieve this, and Coin Market Cap is a well-known option.
