Did you know that there are currently more than 300 million cryptocurrency users in 2022? It’s clearly come a long way since early adopters were trading Bitcoin for hot dogs in the early days.
The incredible return on investment (ROI) when a crypto exchange hits is one of the main reasons for this explosion in popularity. Obviously many are wanting to get in on this new investment opportunity. Like anything having to do with tech, though, there’s a learning curve to get involved. You’ve got to know the language to get involved.
Today, we’re going to be taking a look at cryptocurrency pairs. If you’re ready to learn how to navigate the best crypto exchange to learn how to trade crypto, read on!
What Are Cryptocurrency Pairs?
Let’s start with a definition. Investopedia defines cryptocurrency pairs as “a price quote of the exchange rate for two different currencies traded in FX markets.”
It’s a fairly simple concept that can get complicated fairly quickly. At its root, cryptocurrency pairs aren’t that different than any other currency exchange. In this case, though, the crypto exchange is constantly shifting and changing.
The other reason cryptocurrency pairs can be slightly complicated is that some of the top crypto exchanges feature crypto that can only be purchased with other types of crypto.
These two features also give you an example of how you can leverage cryptocurrency pairs for some tidy profits.
How Cryptocurrency Pairs Work
Cryptocurrency pairs are designed to let you compare the price of different cryptocurrencies. So the best crypto trading platform will have a table with the symbol for different cryptocurrencies.
For example, you might see a cryptocurrency pair marked as ‘BTC/ETH’. This would be a cryptocurrency pair of Bitcoin to Ethereum. Top crypto exchanges will have cryptocurrency pairs for most of the popular currencies.
A crypto exchange in Canada could even have cryptocurrency pairs with Canadian fiat currency!
Now that you’ve got a bit of a visualization, you may be starting to get an idea of how cryptocurrency pairs work. If you’ve done any sort of investing or trading, you may even be starting to see how crypto pairs can make you money.
Say there’s a cryptocurrency pair of ‘.813 BTC/.952 ETH’. Another pair might be ‘.5 ETH/1.5 DASH’. This data alone might not be enough to formulate an investment strategy.
But imagine you keep track of the conversion rates for a while. You might notice an average of around .8 BTC/.9 ETH.’ Armed with this knowledge, you might notice a cryptocurrency pair of ‘.7 BTC/1 ETH’. That’s a good deal, that you should jump on while it lasts.
Investing in crypto is like playing the stock market and investing in futures all wrapped up in one. It takes a certain shift in thinking but once you get used to it, you can potentially make quite a bit of money without having to spend much of your own.
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