What is a base currency?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 3 min
In short
The base currency is the first half of a pair — the asset actually being bought or sold. In BTC/JPY that is BTC, and order sizes are entered in it. Prices are in the quote currency, sizes in the base currency; holding that pairing in mind makes order tickets much easier to read.
Key points
- The first ticker; the asset being traded
- Order sizes are entered in this unit
- Price in the quote, size in the base
- Some venues deduct fees in the base asset
Definition
The asset that is bought or sold in a pair. Written before the slash, order quantities and holdings are counted in its units.
Entering '0.01' in BTC/JPY means 0.01 BTC, not an amount of yen. Some venues offer a yen-amount field, but what reaches the book is always a base-currency quantity. Confusing the two is how people place orders a hundred times larger than intended.
In spot trading, buying raises your base-currency balance and lowers the quote; selling does the reverse. Balance screens are split by asset precisely because that is the underlying structure.
Fee mechanics matter too. Where a venue takes the buy-side fee in the base asset, buying 0.01 BTC credits slightly less than 0.01 BTC. That is usually why the filled quantity and the balance increase do not match.
Watch out for
- · Check whether the size field is in base units or quote amount before submitting
- · Minimum order sizes are defined in base-currency units
- · Depending on which asset fees are taken in, the credited amount differs from the fill