A pair of cryptocurrencies that can be traded for each other. For example, the BTC/ETH pair means you can trade Bitcoin for Ethereum.
A Trading Pair is a combination of two different assets that can be traded against each other on a cryptocurrency exchange.
Think of a trading pair as the basic unit of exchange on a cryptocurrency market. The most common trading pair is a cryptocurrency and a fiat-currency, such as BTC/USD. This pair tells you how many U.S. dollars are needed to buy one Bitcoin. There are also crypto-to-crypto pairs, such as ETH/BTC, and stablecoin pairs, such as BTC/USDT.
A trading pair is always composed of a base currency and a quote currency. The base currency is the asset that you are buying or selling, and the quote currency is the one you are using to perform the trade. For example, in the ETH/USDT pair, Ethereum (ETH) is the base currency, and the stablecoin Tether (USDT) is the quote currency.
Trading pairs are a fundamental part of the crypto ecosystem because they allow for the efficient exchange of assets. Popular pairs like BTC/USD tend to have high volume and liquidity, which makes them easier to trade. Less popular pairs, on the other hand, can have low volume and high slippage.
Understanding trading pairs is crucial for making informed investment decisions. A trader may use a trading pair to hedge against volatility, take advantage of arbitrage opportunities, or simply to trade between different assets. The wide variety of trading pairs available on exchanges gives traders a high degree of flexibility and control over their portfolios.
A Decentralized Exchange (DEX) is a peer-to-peer marketplace that allows users to trade cryptocurrency directly from their wallets without a central intermediary.
When a well-known person (a KOL) tells their followers what to buy or sell. This can be very risky.
A set of rules on a blockchain that allows users to lend and borrow crypto without a bank.
How easily you can buy or sell a cryptocurrency without changing its price much. High liquidity means it’s easy to trade.
A big pool of cryptocurrency that users can deposit their assets into to help exchanges function. They earn rewards for their contribution.
Maker fees are paid when you add a new order to the exchange's order book. Taker fees are paid when you fill an existing order.
