What is a Trading Pair

A trading pair is a financial term used in cryptocurrency trading to indicate the value of one cryptocurrency relative to another. For instance, in the BTC/ETH pair, Bitcoin (BTC) is the base currency, and Ethereum (ETH) is the quote currency. The price of this pair tells traders how much ETH they need to spend to buy one BTC.

Trading pairs are fundamental to the operations of cryptocurrency exchanges, especially the centralized ones, as they facilitate the trading process, enabling users to buy and sell cryptocurrencies against one another. The liquidity and volatility of these pairs can vary significantly, influencing trading strategies and investment decisions.

A more popular trading pair will have higher liquidity and trading volume. A wide variety of trading pairs on an exchange opens an opportunity for triangular arbitrage