Crypto Pairs represent a fundamental concept in cryptocurrency trading, denoting a specific quotation of two digital assets where the value of one asset is expressed in terms of the other. This pairing establishes an exchange rate, allowing traders to buy one cryptocurrency using another, or vice versa, on a trading platform.
Mechanism
On an exchange, a crypto pair such as BTC/USD defines the price of one Bitcoin in US Dollars, serving as the basis for order book construction. When a trade occurs, one asset is exchanged for the other at the agreed-upon rate, facilitating liquidity and price discovery for both components within the pair.
Methodology
The methodology for crypto pairs centers on facilitating relative valuation and transaction execution within digital asset markets. By standardizing the exchange relationship between two assets, these pairs enable direct trading without an intermediary fiat conversion, which optimizes trading efficiency and provides market participants with clear benchmarks for asset value assessment.
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