$BTC

A cryptocurrency pair compares the prices of two crypto tokens, with ETH/BTC being the most common. This indicates how much one Ethereum token costs in Bitcoin. Trading pairs show how much of one token can be bought with a different token. Initially, there were few trading pairs, mostly linked to Bitcoin, but now many altcoins exist, resulting in new trading pairs appearing frequently.

These trading pairs help investors make informed decisions about their transactions. As more pairs are created, traders have more options. To exchange one cryptocurrency for another, a trader must find an exchange that offers the desired trading pair or make multiple trades to achieve the same result. For example, if a trader wants to exchange Litecoin (LTC) for Polkadot (DOT) but their exchange doesn’t support LTC/DOT, they would have to trade LTC for Bitcoin first and then Bitcoin for DOT, incurring extra taxes and fees.

Crypto exchanges are aware of the need to offer a wide range of trading pairs to serve traders better. Some pairs may have more favorable trading conditions, affecting fees and taxes. It’s important for traders to research the costs associated with each trading pair they are interested in.