#TradingPairs101 How Trading Pairs Work (Base Currency vs. Quoted Currency)

Trading pairs are the essence of how financial markets operate, whether in Forex (traditional currencies) or in the world of cryptocurrencies. A trading pair always consists of two assets that are quoted against each other, establishing a value relationship between the two. The way they are presented, for example, BTC/USD or EUR/USD, is not arbitrary and has a very specific meaning in executing your trades.

The first asset in the pair is known as the base currency, while the second is the quoted currency (also called the quoting currency). The base currency is the asset you are buying or selling, and the quoted currency is the asset you use to make that purchase or sale, or the value in which the price of the base currency is expressed. To put it simply, the price you see for the pair indicates how much of the quoted currency you need to acquire one unit of the base currency.

For example, if we observe the pair BTC/USD and its price is 60,000, this means you need 60,000 United States Dollars (USD) to buy 1 Bitcoin (BTC)