What Are Crypto Trading Pairs?
Aug 26, 2021
A crypto trading pair is simply a combination of two cryptocurrencies that can be traded for one another on a crypto exchange. A trading pair is usually represented by the names of the two cryptos, separated by a slash (/). For example: Bitcoin/Ethereum (BTC/ETH) and Ethereum/Litecoin (ETH/LTC). In a trading pair, the first currency is known as the base currency, with the second being the quote currency. In most trading pairs on most exchanges, Bitcoin and Ethereum are used as the base currency. Beyond crypto-crypto pairs, some exchanges also support fait/crypto pairs.
At MEX Digital, we offer both crypto-crypto and fiat-crypto trading pairs:
- Crypto-crypto pairs are two different types of cryptocurrencies that can be exchanged for each other. The trading pair BTC/LTC describes how many LTC must be used to trade for 1 BTC.
- Fiat-crypto pairs are used when you want to exchange fiat for crypto or vice-versa. The trading pair BTC/EUR describes how many EUR must be traded for 1 BTC.
The term “crypto trading” generally refers to trading crypto-crypto pairs. Crypto-fiat pairs are only used when one has deposited fiat onto the exchange to buy a cryptocurrency, or when one sells cryptocurrency for fiat before withdrawing it from the exchange.
Why are Trading Pairs Important?
Crypto pairs are important because they allow people to easily compare prices between different cryptocurrencies, and to trade your desired crypto for various other cryptos. The prices of cryptocurrencies are constantly fluctuating against one another, so trading pairs measure the difference (percentage gain/loss) between either a crypto and another crypto or a crypto and a fiat currency.
How Do You Choose a Trading Pair?
When choosing a trading pair, you should consider all factors involved in the potential trade, and find a trading pair that is offering you the best advantage. For example, trading volume is an important factor to consider before choosing a trading pair. If a trading pair has a small trading volume, then it’s likely that you’ll be waiting for a long time before it goes through. Conversely, selecting a trading pair with high volume will ensure fast trading times.
What are the most popular base currencies?
Bitcoin (BTC) - This is by far the most popular base currency, and almost every crypto can be exchanged with BTC. The only downside is that fees can sometimes be high and transaction times can be slow if the network is congested.
Ethereum (ETH) - This is arguably the second most popular trading pair and the second largest crypto by market capitalisation (BTC being the first).
Litecoin (LTC) - Is another popular trading pair which most exchanges support. It often has much faster transaction times and lower fees than BTC and ETH.
You will have access to multiple trading pairs in both fiat and crypto on MEX Digital when we launch. Sign up to our mailing list on the home page of mexdigital.com and be informed when we launch!