Trading pairs usually consist of two currencies. The first crypto in the pair is called the base currency, while the second is called a quote currency. A quote currency is usually used to value the base currency. If you have a trading pair like BTC/USDT, it means you’re buying Bitcoin for USDT and hoping in the form of a bet that the value of Bitcoin will increase relative to the value of the quote currency, USDT. If the BTC/USDT exchange rate is, let’s say, 20,000, it means you’ll need 20,000 units of the quote currency, USDT, to buy one unit of the base currency, Bitcoin.
The importance of knowing the best quote currency in your trade spans across the crypto ecosystem as it is also used in Forex and world economics. When a trading pair is weak, it automatically means the base currency is decreasing relative to the quote currency. This is usually the case when there’s a decrease in the demand for the base currency, a decrease in the interest rate of the base currency, or an increase in the supply of the base currency. However, if the value of the quote currency decreases, the number of units needed to buy the Quote currency will increase, which is why you need a strong quote currency.
How to choose a quote currency
When choosing a quote currency, asking yourself some fundamental questions is a good practice. What are your plans for 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. That said: formulate your investment goals right at once. After answering this question, consider liquidity and fundamental analysis metrics on the quote currency, like on-chain, project, and financial metrics. Last but not least, volatility, stability and centralization of the company that has issued the coin also should be considered.
Bitcoin vs USDT: Which is a better quote currency?
Bitcoin and USDT are constantly being compared because of their status in the crypto community. Bitcoin is the most popular conventional cryptocurrency, while USDT is the most popular stablecoin. Now, people want to know which will be a better quote currency. We’ll compare both assets based on some parameters, and then you’ll be left to decide.
Based on Liquidity
Bitcoin and USDT might be popular, but we know the cryptocurrency is always on the traders’ lips. Bitcoin is the first cryptocurrency to gain traction, so its popularity supersedes USDTs. This makes Bitcoin more liquid and a good quote currency in any trading pair. Many trading platforms, including Binance, offer bitcoin as a currency in many trade pairs than USDT.
Based on Volatility
Bitcoin is more volatile than USDT. It takes super strength to overlook the volatility of Bitcoin when choosing it as a quote currency. The price change of Bitcoin is so unpredictable that you might want to overlook its liquidity status and go with the more stable option, USDT.
Based on stability
Trading cryptocurrencies with Stablecoins is easier than trading volatile coins like Bitcoin. USDT is a safe haven when it comes to stability. USDT has an intrinsic nature similar to that of fiat currencies because its value does not waver like Bitcoin. It makes transactions more accessible, quicker, and more affordable. You can place your money on USDT to avoid the high volatility of other cryptocurrencies. By choosing USDT as your quote currency, you can avoid exposure to sharp drops in crypto prices.
Trade BTC and USDT for cash on Astro Africa
Astro Africa is the platform for you if you’re in Nigeria or Ghana and need a safe platform to trade your cryptocurrency. Astro Africa is an innovative exchange platform with exceptional features that aims to simplify trading. The features include an intuitive user interface, rates calculator, responsive customer service, ease of access, cross-platform availability for Android and iOS, referral bonuses, and security. To get started on Astro Africa, visit our website or download the mobile apps, create an account using your valid email address and phone number, and proceed to sell Bitcoin or USDT for naira or Cedis. If you want to calculate the current rates of your Bitcoin and USDT, use the Astro Africa rates calculator.
