Get Into Cryptocurrency Trading Today

Over the years, cryptocurrencies have changed the world of finance. They are more than 9000+ highly volatile cryptocurrencies. As a result, many potential investors are looking to get involved in the industry. But, it is easy for newcomers to get lost in useless information as they try to figure out how trading cryptocurrency pairs work.

This article will look into cryptocurrency pairs and how they work. We will also help you choose the best cryptocurrency trading pairs. Without further ado, let us get started!

Is trading cryptocurrency pairs profitable?

The primary business among crypto traders is trading cryptocurrency pairs. This involves exchanging two different types of currencies, like fiat-to-crypto or crypto-to-crypto. For example, if you are looking to buy or sell bitcoin with USD, your crypto trading pair will likely be BTC/USD. If you would prefer to buy or sell Bitcoin for Ethereum, your trading pair will be BTC/ETH.

Thus, a cryptocurrency pair is a quotation that denotes two kinds of currencies. Usually, there is one currency quoted against the other. The first listed currency is the base currency, while the other is the quote currency. Through currency, you can compare the value of one currency to another. It shows how much of the quote currency you need to buy the base currency. 

Trading currency pairs occurs in cryptocurrency exchanges. Different exchanges have different crypto pair listings. Thus, you have to ensure your preferred pair is on offer. Also, you cannot exchange some digital currencies directly for others. In turn, you will have to execute a few pairs to trade before getting your desired crypto. This is also known as complex arbitrage trading. Some of the most popular base currencies include Bitcoin, Ethereum, and Litecoin. 

Traders generate profits from the currencies changing rates while trading cryptocurrency pairs. For instance, when you buy Ethereum and sell Litecoin (ETH/LTC), you will find a buyer looking to buy your ETH tokens for another crypto. You should always look for a higher bid than your initial buy to make a profit. Thus, making a profit from the transaction and begin the process again.

How to trade cryptocurrency pairs

If you are a beginner in the crypto market, your first trading pair is likely to be EUR/BTC or USD/BTC. This depends on your native fiat currency. On your preferred exchange platform, you will convert fiat currency to base currency. For example, maybe Coinbase is your preferred exchange. Deposit the USD into your Coinbase wallet and buy bitcoin, which will serve as your base currency. Also, ensure you have a secure wallet to hold and store your digital coins.

Next, you can opt to continue trading with crypto base currencies or buy altcoins. In our example, since you have BTC, you can trade with any pair listed on the BTC exchange. If you want to trade altcoins, you have to look for an exchange platform that only allows crypto deposits. Thus, you can only use the purchased base currency to buy altcoins but not fiat or domestic currency.

How to choose the best cryptocurrency trading pairs

Before you start trading cryptocurrency pairs, you have to get as much trading education as possible. This is only possible through conducting an in-depth analysis of the market. Perform a fundamental analysis of some of the most popular cryptocurrencies. Choose one that is most profitable and suitable for you. After researching, you will have adequate knowledge to select the best crypto pairs.

With many cryptocurrencies available, it can be daunting to choose the most suitable. So, begin by analyzing the most popular crypto pairs on your preferred exchange. Some of the most popular crypto-to-crypto pairs are BTC/ETH, BTC/LTC, ETH/LTC, and USDT/BTC. These pairs are more popular than others due to their high demand, making buyers easy to find. Proceed to analyze the trading volume of many crypto pairs. Also, check their co-relation with other assets. 

Another vital factor to consider when looking for the best trading cryptocurrency pairs is their liquidity. This is the ability to trade digital coins easily, which defines the amount of profit gained from each trade. The better the chances of liquidity, the more the options to sells your digital currency quickly. Demand affects liquidity, meaning it is essential to look for cryptocurrencies that are in high demand. 

Which is the best cryptocurrency pair to trade?

As the cryptocurrency industry continues to grow in popularity, almost everyone in the world has heard about bitcoin. Furthermore, it has increased in value and is still in high demand. Thus, bitcoin is the best base currency for most crypto pairs. Most exchanges have it listed, so using it in your pairing gives you more trading opportunities. 

Ethereum is another popular cryptocurrency with immense worldwide demand. Due to the smart contracts available on its platform, it is almost as famous as bitcoin. As a result, you can choose many cryptocurrencies to trade for it. 

Another popular base currency is Tether (USDT) and is one of the best stable coins. More people worldwide are looking to trade with it because of the connection of its exchange rate with the U.S. Dollar. In turn, more exchanges continue adding this digital token to their listing as it provides all the benefits of a cryptocurrency. Currently, Tether has one of the highest liquidities and the largest 24-hour trading volume, making it easy to choose from many crypto pairs. 

Conclusion

The cryptocurrency industry is one of the fastest-growing markets, giving rise to more opportunities to make profits. Although the market has plenty of drastic highs and lows, trading cryptocurrency pairs can eventually provide massive profits. Additionally, this market is very flexible as it is open 24/7. 

However, it is also vital to undertake plenty of research before you start to trade cryptocurrency pairs. Acquire as much trading education as possible and thoroughly analyze the market. Also, read on successful trading strategies and trading psychology as they both play crucial roles when trading cryptocurrency pairs. You also have to be aware of economic and political news in the world that may affect the crypto market. Always ensure you are up-to-date with the latest crypto announcements and news. 

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