![]() ![]() The Holders’ Composition by Time Held suggests that 62% of users hold BTC for longer than a year, the transactions greater than $100K over the past 7 days, as of writing, are $399.94b. While the Bitcoin FA is a topic worth a separate piece, this seems like an appropriate time to show how this coin has a potential. These metrics are, for example, on-chain metrics, project metrics, and financial metrics. Fundamental Analysis (FA): Even though fundamental analysis is a tricky thing in crypto where non-traditional FA indicators are applied, there are at least some strong standards that can provide a big picture on a coin.For example, on Binance, you can trade more than 200 coins (including fiat) against Bitcoin. Trading platforms offer it as a quote currency in many pairs. That makes it a sure starting point for entering the market. Liquidity: If not the most popular crypto coin out there, Bitcoin is very popular and liquid. ![]() But let’s see how our potential candidates meet the requirements mentioned above. The most obvious choices these days are Bitcoin and Tether. After that I look at supply and demand: how much is there?” If the quote currency is going to be used in an area of high volatility, or if we don’t have much information about it yet, we might want to do more research before making a decision. I start by asking myself: “What am I trying to accomplish?” If it’s just a one-time transaction, I might choose a different quote currency than if I’m looking at doing business with them over the long-term. TradeSanta’s special guest expert, Krishna Rungta, the Founder of a free library of online tutorials Guru99, has shared his process of choosing a quote currency while trading: “ I like to think about it this way: when you’re choosing a quote currency, you have to consider what the currency will be used for, how it’ll be used, and what your goals are. Last but not least, volatility, stability and centralization of the company that has issued the coin also should be considered. Then, consider liquidity and fundamental analysis metrics of the chosen quote currency – such as on-chain metrics, project metrics, financial metrics. That said: formulate your investment goals right at once. When choosing a quote currency, it’s a good practice to first ask yourself a couple fundamental questions. What are your plans on the quote currency? Do you want to use it to buy other coins or do you want to use it as a store of value? In this case, you will have to sell other assets, to keep the change in quote currency. Most traders do so, but there’s no such thing as too much research and precaution, isn’t there? ![]() ![]() How to choose a Quote Currency?Īt this point, you’re probably thinking that you’ve always traded from the currency that you’ve owned or the currency that has had more liquidity. The BTC/USDT exchange rate of 23,796 reflects that you need 23,796 units of the quote currency, Tether, to buy one unit of the base currency, Bitcoin. When you buy the BTC/USDT pair, you basically buy Bitcoin for USDT and bet that Bitcoin will go up relative to the price of the quote currency, USDT. The quoted currency, the second currency in the trading pair, shows how much you need to spend to buy one unit of the base currency.īased on our picture, we can see that one USDT equals 5.20732 BRL20 one Bitcoin is worth 122330 BRZ, one Ether costs 9682 BRX, one 18C is equal to 0.00000005 Bitcoin. In the example above, the base currency is USDT, BTC, ETH and 18C, while the quoted currency is BRL20, BRZ and BTC, respectively. A quote currency in a trading pair is the second currency that is used to value the base currency, the first currency in the pair. ![]()
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