What's token trading?

Published on Aug 22, 2023Updated on Dec 19, 20232 min read134

Token-to-token trading refers to exchanging a digital asset with another digital asset.

Certain tokens, like Bitcoin and Litecoin, are typically priced in USD. This is called a currency pair, which means a digital asset’s value is determined by its comparison to another currency.

For example, a BTC/USD pair represents how much USD is required to buy one BTC, or how much USD will be received for selling one BTC. The same principles would apply to all trading pairs. If OKX were to offer a LTC/BTC pair, the LTC/BTC designation represents how much BTC is required to buy one LTC, or how much BTC would be received for selling one LTC.

What are the differences between token trading and cash-to-crypto trading?

While token trading refers to the exchange of a digital asset for another digital asset, cash-to-crypto trading refers to the exchange of a digital asset for cash (and vice versa). For example, with cash-to-crypto trading, if you buy BTC with USD and the BTC price increases later, you can sell it back for more USD. However, if the BTC price drops, you can sell for less.

How are prices determined in token trading?

Just like cash-to-crypto trading, the market prices of token trading are determined by supply and demand.