A trading pair is a pairing of two different cryptocurrencies or a cryptocurrency and a fiat currency that can be traded for one another on an exchange. For example, BTC/USD means you can exchange Bitcoin for US dollars (or vice versa). The first currency is the "base," and the second is the "quote" currency.

Trading pairs determine what you can directly trade without converting through intermediate assets. If an exchange doesn't offer ETH/SOL, you'd need to trade ETH → BTC → SOL, incurring extra fees. More trading pairs generally mean better liquidity and pricing options.

Key Characteristics of Trading Pair

  • Format: BASE/QUOTE (e.g., BTC/USDT means 1 BTC = X USDT)
  • Direct vs Indirect: More pairs = fewer conversion steps
  • Liquidity Matters: Popular pairs (BTC/USDT) have better spreads
  • Stablecoin Pairs: Often use USDT, USDC, or BUSD as quote currency
  • Cross-Pairs: Altcoin-to-altcoin pairs (ETH/BNB, SOL/AVAX)

Real-World Example

If BTC/USD shows $50,000, one Bitcoin costs $50,000. If ETH/BTC shows 0.06, one Ethereum costs 0.06 Bitcoin (or $3,000 if BTC is $50,000). Understanding trading pairs helps you calculate actual values and find arbitrage opportunities.

Understanding Trading Pair is easier when you're familiar with these related concepts:

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