What Is A Currency Pair?
A currency pair is the ratio of two currencies, which shows how many monetary units of one currency will have to pay when buying one unit of another currency. For example: in a DASH / BTC pair, you buy an altcoin DASH for bitcoins. In this case, the first cryptocurrency is called “base”, and the second is considered “quoted”.
You can see that crypto coins are paired with some underlying cryptocurrencies convert btc to eth. These are “Trading Pairs” in cryptocurrencies. Cryptocurrency currency pairs are trading between one type of number and another. For example, with BTC / ETH, you can buy Ethereum with Bitcoin or Seel Ethereum for Bitcoins. It’s just an exchange of different currencies. So, not only can you buy altcoins using fiat currencies like USD, you can buy one cryptocurrency with another.
Most often, this “other asset” is USD, since it is the world currency, it is the most popular and massive, or USDT. Many people are accustomed to paying in dollars and converting the price into dollars, as it is just convenient.
The Following Aspects:
- Market capitalization. Coins with a low market capitalization show quite strong price spikes even in a very short period of time. So, young altcoins sometimes grow by 150% in a couple of hours in the afternoon, and later fall by 400-600% in the evening.
- Latest news. The crypto market is based on news and it is important to understand the informational background of the coin that you have chosen to trade.
Top Five Cryptocurrency Pairs
- BTC / ETH
- BTC / USDT
- ETH / USDT
- ETH / LTC
- BTC / LTC
Why Are Trading Pairs Important In Cryptocurrency?
Now that you know what cryptocurrency trading currency pairs are, you may be wondering: “Why are they needed?” Well, there is a simple answer for that: “To make large sums of profit.” Trading pure cryptocurrency pairs is much more profitable than trading mixed pairs: a figure with fiat. If you hold on to the purchased pair, you can make a profit with the same investment.
Simply put, long-term financial transactions with cryptocurrency currency pairs are nothing more than an active type of investment. These are the basics of cryptocurrency trading. You don’t have to invent anything new.
Let’s take an example for your better understanding on this matter. Let’s say you have satoshi and a fiat currency like USD and want to buy Ethereum. Let’s say you purchased 10 ETH using Bitcoin at 0.1 BTC. Now that the price of Ethereum is going up and Bitcoin is going down, this means that you can buy more Bitcoins with your ETH.
Now let’s say the best crypto trading pairs ETH / BTC value is 0.15 BTC. This means that you now have 1.5 BTC if you are trading ETH for BTC. You have 0.5 BTC more in stock than you used to.
Sometimes, even though the monetary value of your number remains the same, the number of coins you hold increases. If you could trade correctly with cryptocurrency currency pairs, you would get more coins.
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