Crypto Trading Pairs: What You Should Know
This article covers what newbie crypto trader should know about crypto pairs and what how they can be traded .
There are over 1,200 crypto-assets on the market today. If you’re new to the world of crypto trading, these numbers can be a little overwhelming. To invest in a specific crypto token such as Litecoin or Ethereum, you first need to buy another type of token known as ‘crypto-asset pairs’. These trading pairs help investors buy and sell tokens related to specific altcoins. When you take into account all the different types of tokens available on the market today, there are over 200 possible combinations when it comes to buying and selling various coins. If you’re just getting started with crypto trading and don’t understand what these trading pairs mean or why they’re necessary, read on for an explanation of how they work and which ones you should know about before making your next investment.
What is a Crypto Trading Pair?
A crypto trading pair is a combination of two different types of tokens that are paired together for investors to buy and sell. Depending on the type of crypto trading pair being used, one of the tokens will be used to buy the other. The first token in a crypto trading pair is called the "base token." This token is a type of blockchain-based digital currency that is used to buy or sell other crypto tokens on a particular exchange. The second token in a crypto pair is called the "counter token." This token is paired with the base token to facilitate transactions. As a crypto trader, you can think of the base token as being like a local currency. The counter token is the type of currency that you use to buy things like a cup of coffee or a car. To buy the things you need and want, you need to make sure you have enough base tokens to exchange for the counter tokens.
Bitcoin-Based Trading Pairs
Most people have heard of the term "Bitcoin" and may have even used this crypto token at one point or another. But not everyone knows that there are different types of Bitcoin-based trading pairs. Bitcoin/USD - This is the most common Bitcoin-based trading pair, with it being tied directly to US dollars. With this type of pair, one token is the Bitcoin token, and the other is the USD. Bitcoin/Altcoins - Sometimes referred to as ‘alt-to-alt’, this is one of the most common and popular types of Bitcoin-based trading pairs. This type of trading pair allows investors to buy and sell altcoins, such as Ethereum, Litecoin, and Ripple, using their Bitcoin tokens.
Ethereum Based Pairs
The most popular Ethereum-based trading pairs are ether and ether classic (ETC). Ether is used to buy and sell the Ethereum token. If you want to buy and sell other types of tokens, you’ll have to buy ether first. If you want to buy and sell other tokens that aren’t Ethereum or ether-based, it’s important to understand which trading pair you’ll need to use. For example, if you want to buy Dogecoin, you’ll have to buy Dogecoin tokens with ETC, which trades under the symbol DOGE.
Litecoin Based Pairs
The well known Litecoin-based trading pairs are Litecoin and Litecoin Cash(LTC and LCC, respectively). LTC is used to buy and sell the Litecoin token. If you want to buy and sell other tokens, it’s important to buy LTC first. LCC is used to buy and sell other tokens. There are many ERC-20 tokens that can only be bought and sold with Litecoin Cash. Like Ethereum, there are many tokens that aren’t litecoin-based. If you want to buy any other types of tokens, you’ll have to buy Litecoin first and use the Litecoin trading pair to buy the other tokens. For example, if you want to buy EOS, you’ll have to buy EOS tokens with LTC.
Ripple Based Pairs
Popular Ripple-based trading pairs are ripple and ripple classic (XRP and XRP classic respectively). XRP is used to buy and sell the Ripple token. If you want to buy and sell other tokens, you’ll have to buy XRP first. XRP classic is used to buy and sell the XRP token. Like litecoin cash, XRP classic can only be used to buy and sell other tokens (such as bitcoin cash). If you want to buy and sell other tokens that aren’t ripple-based, you’ll have to buy XRP first. For example, if you want to buy ethereum classic, you’ll have to buy ethereum classic tokens with XRP.
Conclusion
There are hundreds of different crypto trading pairs available on the market today. The easiest way to make sure you’re investing in the right ones is to buy bitcoin or ether and use them to buy other coins. It’s also important to remember that not every coin is available on every exchange. You may have to use different exchanges to buy and sell different tokens.
