What Are Base Currency And Quote Currency In Crypto
Ever wondered what is the difference between BTC/ETH and ETH/BTC? If you are new in the crypto markets, grasping the concepts of base and quote currency can have you navigate the landscape with confidence.
Understanding the difference between base currency and quote currency and how they work together in trading pairs will empower you to make more informed decisions in the markets.
What Is Base Currency In Crypto
The base currency in crypto is the first currency listed in a crypto trading pair and is the currency against which other cryptocurrencies or assets are valued.
Crypto trading pairs are typically represented in a manner such as AAA/BBB. The ticker before the “/” is the base currency. The base currency, which is the first cryptocurrency in a crypto trading pair, is AAA in this case. Using BTC/USDT as another example, BTC is the base currency.
What Is Quote Currency In Crypto
The quote currency is the second part of any crypto trading pair and it is the currency that is being quoted to the base currency.
The ticker after the “/” is the quote currency. Using the earlier example, the quote currency in a hypothetical crypto trading pair AAA/BBB is BBB. In a real-life example, USDT is the quote currency of the BTC/USDT crypto trading pair.
How To Read Crypto Trading Pairs
With an understanding of base and quote currency, you will be able to effectively read crypto trading pairs.
Let us take a look at the ETH/USDT crypto trading pair. ETH (Ethereum) is the base currency and USDT (Tether) is the quote currency. If the quote price of the trading pair is 2000, this means that 1 ETH is valued at 2000 USDT. The price of the trading pair indicates how much of the quote currency is needed to buy or sell one unit of the base currency.
Disclaimer: This material is for information purposes only and does not constitute financial advice. Flipster makes no recommendations or guarantees in respect of any digital asset, product, or service.
Trading digital assets and digital asset derivatives comes with significant risk of loss due to its high price volatility, and is not suitable for all investors.