What is a quote currency?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 3 min
In short
The quote currency is the second half of a pair — the unit in which the price is expressed. In BTC/JPY the yen is the quote currency, and prices and profit are shown in yen. Change the yardstick and the same trade reads differently.
Key points
- The second ticker; the unit prices are shown in
- Profit and fees are also computed in it
- Yen in Japan, mostly USDT overseas
- A stablecoin quote is not a fixed dollar
Definition
The currency in a pair against which the base asset is measured. Written after the slash, it is the unit of every price in the order book.
ETH/JPY and ETH/USDT buy the same Ether but quote it in different units. Placing a buy order spends the quote currency, and selling returns it. In effect the quote currency is your cash balance on that venue.
Overseas venues mostly quote in stablecoins such as USDT or USDC. These are designed to hold near one US dollar, but 'near' is not 'exactly'. If the quote currency itself moves, your profit measured in yen diverges from the number on screen.
Even yen-quoted pairs are exposed to FX when the venue references overseas prices. Whatever the quote currency, if you ultimately value everything in yen you have to watch both the asset and the quote side.
Watch out for
- · Profit shown in USDT is not profit measured in yen
- · Without the quote currency on hand you cannot buy, however listed the asset is
- · Japanese tax reporting needs yen values, so record the rate at execution