ᐅ Trading pairs explained ⚡ How they work in crypto

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Trading Pair – What Is It in Trading?

Trading Pair – What Is It in Trading?

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Any exchange asset is bought and sold. In exchange, the trader gives fiat or virtual currency. The principle of a pair is as follows — the first element is the asset being bought, and the pair is completed by the currency that the trader pays for the purchase. The absence of either of these elements would mean a gift or a gratuitous transaction. This is practically impossible in the market, so one asset is always exchanged for another. This is how the principle of pairing can be described in simple terms.

What Are Pairs and How Do They Work

A cryptocurrency pair is two assets that can be traded for each other on a cryptocurrency exchange. A pair allows comparing the value of one coin relative to another. Exchanges offer several different pairs for one cryptocurrency to make it more convenient for traders to execute trades.

There is a concept of a base cryptocurrency. Such an asset has the widest circulation, and most traders readily accept it as payment. Additionally, some pairs may contain a cryptocurrency and a fiat currency.

Let's give examples of cryptocurrency pairs: BTC/ETH, ETH/BNB, or ETH/SHIB. It's worth noting that the same coin can be traded in different pairs: BTC/ETH, BTC/LTC, BTC/BNB. There are also fiat pairs, which are placed in the FIAT section of any exchange, for example: ADA/RUB, BNB/RUB, or SOL/RUB.

Benefits of Cryptocurrency Trading Pairs

Excellent knowledge of cryptocurrencies and the pairs in which they are traded allows a trader to perform the following operations:

some cryptocurrencies can only be bought with other cryptocurrencies, knowledge of pairs will help expand the list of acquired coins;
earning from arbitrage — the difference in the cost of the same asset on different exchanges will allow for good earnings, it's important to consider the necessary trading pairs;
the difference between cryptocurrency rates — the value of currencies within one pair also allows for earning.