Complete Guide to Spot Trading

Direct Exchange Methods Between Digital Assets

In the world of digital asset trading, crypto-to-crypto trading refers to the method of directly exchanging one cryptocurrency for another. Simply put, it skips intermediaries (fiat currency) and enables peer-to-peer conversion between assets.

The most common example is measuring the value of Bitcoin(BTC) in USDT (Tether). When we say “1 BTC equals how many USDT,” it forms a BTC/USDT trading pair. Similarly, if we measure the value of Litecoin(LTC) in Bitcoin, it results in an LTC/BTC trading pair—for example, 1 Litecoin is worth 0.01 Bitcoin.

This trading method operates on a matching mechanism: based on price priority and time priority, when your buy price ≥ the seller’s sell price, the trade executes immediately. Whether stablecoins are used as the quote currency or other digital assets, the underlying logic remains the same.

Why Choose Crypto-to-Crypto Trading

The core advantage of crypto-to-crypto trading is lower costs and a simpler process.

Imagine a scenario: you hold Bitcoin and want to exchange it for Ethereum. Using traditional fiat trading, you need to sell BTC (pay a fee), then use the fiat obtained to buy Ethereum (pay another fee), totaling two costs. Crypto-to-crypto trading allows you to directly convert BTC to Ethereum with just one fee, and possibly enjoy more favorable rates.

This approach also offers other benefits:

• Reduce trading friction costs — eliminate unnecessary intermediaries
• Provide arbitrage opportunities — price differences across platforms for different pairs may create arbitrage chances
• Enhanced privacy — no fiat inflow or outflow involved, on-chain transactions are more direct
• Higher asset liquidity — more flexible and quick conversions between different digital assets

How Is the Price of Crypto-to-Crypto Trading Determined?

The price of trading pairs is determined by market supply and demand, consistent with fundamental market principles.

When more people want to buy a certain asset, demand increases, and the price of that asset rises; conversely, when more people are selling, supply increases, and the price drops.

For example: suppose suddenly many people want to exchange their Bitcoin for Litecoin. This causes a shortage of Litecoin in the LTC/BTC trading pair, pushing up its price. In data terms, perhaps previously 1 Litecoin only required 0.009 Bitcoin, but now it might require 0.012 Bitcoin to exchange. Such price fluctuations are entirely driven by the genuine willingness of market participants, occurring naturally.

The essence of crypto-to-crypto trading is to facilitate efficient circulation of different digital assets under the guidance of market supply and demand.