#TradingPairs101

Trading Pairs 101: How to Exchange Cryptocurrencies

In the crypto world, you don't "buy Bitcoin" directly, but rather exchange one asset for another. This is done through trading pairs.

What is a Trading Pair?

A trading pair consists of two coins or assets that can be exchanged for each other on a platform. They are expressed as BASE/QUOTE.

BASE: The currency you want to buy or sell. QUOTE: The currency used to determine the value and complete the transaction.

Example: BTC/USDT means you are exchanging Bitcoin (BTC) for Tether (USDT). If the price is $70,000, 1 BTC is worth 70,000 USDT.

Why Are They Important? They define the exchange rate: They tell you how much of the quote currency you need for one unit of the base. They enable transactions: You can only trade existing pairs on the platform. They show liquidity: Popular pairs have more volume and are easier to trade. Common Types of Pairs

Pairs with Stablecoins (e.g., BTC/USDT): The quote currency is a stablecoin (like USDT, USDC) that maintains a stable value (generally tied to the dollar). They are the most common for buying and selling crypto.

Pairs with Fiat (e.g., BTC/USD): The quote currency is a traditional currency (like USD, EUR). They are used on platforms that allow direct deposits and withdrawals of traditional money.

Crypto-to-Crypto Pairs (e.g., ETH/BTC): The quote currency is another popular cryptocurrency (like BTC or ETH). They allow exchanges between different cryptos without going through a stablecoin or fiat.

How to Interpret a Price

If ETH/BTC has a price of 0.05 BTC:

It means that 1 Ethereum (ETH) is worth 0.05 Bitcoin (BTC). To buy 1 ETH, you spend 0.05 BTC. To sell 1 ETH, you receive 0.05 BTC. Key Tips Understand the quote currency: Always know what you are trading against. Check the liquidity: Choose pairs with high volume for smooth trading. Analyze both assets: In crypto-to-crypto pairs, the movement of both currencies affects the price.