Trading pair

A trading pair is two assets that are exchanged for each other on an exchange, such as BTC/USDT. The pair's price shows how much of the second asset one unit of the first costs.

How it works

The first asset is the base, the second is the quote. In BTC/USDT the base is BTC and the quote is USDT, so a price of 60,000 means 1 BTC costs 60,000 USDT. Buying the pair means giving the quote asset to get the base; selling is the reverse.

Most crypto trading is against stablecoins (USDT, USDC), bitcoin, or fiat currencies like EUR. If the pair you want does not exist, you swap in two steps through a popular asset. Each pair has its own order book, liquidity and spread.

The same coin can trade in several pairs at slightly different prices and liquidity. Popular pairs are usually cheaper to trade: the spread is tighter and a large order moves the price less.

Example with numbers

You want to swap SOL for ADA, but there is no SOL/ADA pair. You sell 2 SOL on SOL/USDT at 150 and get 300 USDT, then buy ADA on ADA/USDT at 0.40 and get 750 ADA (before fees on the two trades).

Common mistake

A common mistake is reading a pair backwards and misreading the price, for example assuming ETH/BTC is quoted in dollars. Always check which asset comes second: the price is in that asset. And check the pair's liquidity before trading, especially for lesser-known coins.

Questions and answers

What is a trading pair in simple terms?

It is two assets swapped for each other, like BTC and USDT. The price says how much of the second you pay for one unit of the first.

What does BTC/USDT mean?

It is the pair where bitcoin is bought and sold for USDT. A price of 60,000 means 1 BTC costs 60,000 USDT.

Which pair should I use to buy crypto?

Usually the pair against a stablecoin or your fiat currency with the most trading volume. Spreads are tighter and slippage smaller there.

Trading pair

How it works

Questions and answers

Related terms

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