In cryptocurrency trading, a trading pair refers to the combination of one asset being exchanged for another asset. For example, BTC/USDT represents buying or selling Bitcoin with USDT (Tether), while ETH/BTC represents buying or selling Ethereum with Bitcoin. The first currency in the trading pair is called the base currency, and the second currency is called the quote currency. The trading price is usually expressed as the value of the base currency relative to the quote currency.

Types of trading pairs

According to the differences between base currency and quote currency, trading pairs can be divided into the following types:

  1. Fiat trading pairs: for example, BTC/USD, ETH/EUR. The base currency is cryptocurrency, and the quote currency is fiat currency.

  2. Stablecoin trading pairs: for example, BTC/USDT, ETH/USDC. Stablecoins serve as the quote currency due to their stable value, making them suitable for investors to avoid volatility risks.

  3. Cryptocurrency trading pairs: for example, ETH/BTC, LTC/ETH. Both the base currency and the quote currency are cryptocurrencies, suitable for cross-asset investment.

Choose the appropriate trading pair

When choosing a trading pair, it is necessary to evaluate based on investment goals and market conditions:

  • Trading purpose: If the goal is to switch from fiat to cryptocurrency, choose fiat trading pairs (e.g., BTC/USD); if it is an exchange between cryptocurrencies, you can choose cryptocurrency trading pairs (e.g., ETH/BTC).

  • Market depth and liquidity: Trading pairs with higher liquidity (e.g., BTC/USDT) usually experience smaller price fluctuations, suitable for stable investments; niche trading pairs may have larger fluctuations, suitable for high-risk investors.

  • Fee considerations: Some trading pairs may have higher fees, and investors need to pay attention to the platform's fee structure.