The best cryptocurrency pairs to trade
The cryptocurrency market consists of more than 2,000 assets with different prices, trading volumes, capitalisation and popularity. For example, you may find that the most valuable asset is 42-coin, which has an exchange rate of around $20,000. However, it's not suitable for trading because it has low liquidity.
You may realise that among some 2,000 assets, only a dozen are used for trading. So what are the best cryptocurrency pairs to trade? How do you choose them correctly?
How to choose the best crypto trading pairs
All traders enter the market after performing an in-depth analysis of a few cryptocurrencies to select an asset to make the most profit. Then, they perform a technical analysis of cryptocurrency pairs to understand trends and market behaviour.
However, a fundamental and technical analysis won't allow you to begin trading. You have to choose the best trading pair first. This may seem simple, but choosing the wrong trading pair will leave you with only a small profit or even a loss.
First, you have to analyse which pairs are popular on most exchanges. We can see many orders with the '[coin] to USD' pair. In terms of crypto-to-crypto pairs, the most popular are BTC/ETH, BTC/LTC, USDT/BTC and ETH/LTC, among others.
These pairs are successful because there's a global demand for Bitcoin, Ethereum, Litecoin and other similar cryptocurrencies. Traders can easily find buyers at the right moment.
Check the trading volume of different cryptocurrencies and then look for their connection with other assets. It's the best way to find profitable trading pairs on the market if you don't want to trade Bitcoin, Ethereum or Bitcoin Cash.
What about liquidity?
Liquidity is the primary factor that affects the choice of cryptocurrency pair trading. This refers to the ability to sell assets quickly. The higher the liquidity, the more opportunities you'll have to sell the asset on the market. Liquidity, then, defines the profit you can gain from each trade.
Liquidity isn't just about the speed of closing an order but lower risks, too. If you always have buyers, you won't lose on a bearish trend and won't need to establish a low exchange rate to make an asset attractive to buyers.
The demand for a cryptocurrency usually affects its liquidity. This is why BTC, LTC, ETH, USDT, BCH, BNB and other cryptocurrencies are the leading choices for the best cryptocurrency pairs.
What base currency should you use?
Everyone in the world has heard about Bitcoin. Although this cryptocurrency isn't the best from a technical point of view, it's one of the best for trading simply because most people want to buy Bitcoin. That is why Bitcoin is the best base currency for most pairings.
Coinmarketcap even shows the exchange rate to Bitcoin for every cryptocurrency. BTC is listed on all exchanges, so if it's in your pairing, you'll have many trading opportunities.
Ethereum is also a good choice for trading pairs. It's almost as popular as Bitcoin because of the smart contracts available on its platform. ETH has tremendous worldwide demand, and you can choose many cryptocurrencies to trade for it.
The third base cryptocurrency for many pairs is Tether (USDT). It became popular only about a year ago and is one of the best stable coins. USDT is used worldwide because its exchange rate is linked to the US dollar. That said, it provides all the benefits of a cryptocurrency. That is why an increasing amount of exchanges are adding Tether to their lists. Today, USDT has the highest 24-hour trading volume and one of the highest liquidities, so you can easily choose it for many pairs.
What are the advantages of one pair over another?
There are several advantages to popular trading pairs, such as the fact that all of them provide good trading possibilities and high profits. However, some pairs may be preferable depending on the exchange you use to trade.
Most exchanges show the largest volume on ETH/BTC pairings because these two cryptocurrencies were added to all listings. BKEX, for example, has EOS/USDT as the best trading pair. There are more opportunities to trade EOS here as opposed to ETH or BTC.
The next example is the LTC/BTC pair. It was the most popular pair some years ago, but now, it's better to trade LTC/USDT instead of LTC/BTC. Why? Because LTC/USDT has a higher trading volume and liquidity, according to Coinmarketcap.
There are two advantages to choosing one pair over another. Firstly, a particular pair can bring you more profit. Secondly, you'll have more buyers to close more orders during the trading day.
The best cryptocurrencies for trading based on last year
Every year, trading pairs change due to different factors:
- New cryptocurrencies are released.
- Some projects make good updates, so their assets become more popular on the market.
- Certain news affects the market, so different assets lose demand.
It's important to analyse the best cryptocurrency trading pairs from past years because it helps to understand the market. This allows you to choose pairs for future trading and your investment portfolio.
The best crypto trading pairs in 2018
The beginning of 2018 showed that BTC defines all market trends, so most pairs were connected with this cryptocurrency. Many innovative projects hadn't been released at that time, so traders relied on trusted assets like Bitcoin, Ethereum, Litecoin and Bitcoin Cash. All of them had great demand and liquidity. For many companies, Bitcoin Cash even became preferable to the original Bitcoin.
Ripple became the discovery of the year. Although it was released in 2012, many banks and other organisations only recognised it in 2017-2018. In the middle of 2018, the Ripple blockchain was used as an alternative for top world banks like MUFG or Banco Santander.
The best crypto trading pairs of 2018 were:
The best crypto trading pairs in 2019
The cryptocurrency market saw many changes in 2019 thanks to the many new projects that appeared. People became increasingly disenchanted with BTC, so its trading volume went down. EOS was released and became ETH's main competitor. Binance Exchange created its own asset, Binance Coin, which became popular on many exchanges.
The most important fact is that new projects replaced LTC and BCH. Today, BCH and LTC have good trading volumes and liquidity, but they aren't even in the top 10 trading pairs.
In 2019, BTC/USDT became the best trading pair. Moreover, it became the most famous pair in cryptocurrency history. Many analysts strongly advise beginners to start with the BTC/USDT (USDT/BTC) trading pair because it provides the best liquidity. Traders can enter the market with a low budget and close many positions.
The other popular trading pairs for 2019 were:
The best cryptocurrency pairs to trade in 2020
As of the time of writing, the cryptocurrency market has become more popular worldwide. Many countries are striving to implement certain assets as alternative payment methods, which is why many cryptocurrencies have become more stable and accessible for trading.
USDT currently has the highest trading volume. USDT/BTC, USDT/XRP, USDT/ETH and USDT/EOS will be very popular in 2020. You can enter the market with 100 USDT and make a considerable profit.
EOS has provided some updates, so its blockchain is now faster and more secure. EOS's popularity has therefore risen on many exchanges. EOS/USDT, EOS/LTC and EOS/BTC show significant trading volume.
Lastly, many organisations have recognised Tron as one of the best platforms for exchanging content. The Tron Foundation has gained new investors, and the price of TRX has slightly increased. TRX/BTC, TRX/XRP and TRX/ETH are prevalent trading pairs on the Asian market. If you trade on OKEx or Huobi, pay a lot of attention to TRX trading pairs.