If you are new to Crypto, you may have heard of some of the more prominent forms of cryptocurrency, with names like Bitcoin and Ethereum. You may also have heard of some that failed in the early days because they had problems like a weak ecosystem or poor security, such as Luna or SpaceBIT.
However, these names, famous though they are, barely scratch the surface. Those with more knowledge of the sector can easily name loads more, such as Chainlink, Solana, Hedera, and TRON (though the last shares its name with a 1980s sci-fi film).
How Crypto Markets Compare With Other Sectors
In this sense, cryptocurrencies are like any other industry or sector. Just as there are a few very famous sports teams and many more that are little-known except to a local audience, or just as there are some familiar big-name retailers as well as small ones few are familiar with, so it is with Crypto.
That analogy is useful in another way. History is littered with the names of big, successful companies that lost their way and others that started small and became great. So too, leading sports teams can decline and smaller ones rise up to unprecedented levels of glory – just ask any soccer fan in the German city of Leverkusen.
In a relatively new market like cryptocurrency, there will be many opportunities for different currencies to rise, just as some will fall, which makes the trading of them a very active market indeed.
What You Can Do With A Volta Wallet
Using your Volta Crypto Wallet, you can carry out all sorts of transactions. Many of these come through having Crypto Pairs. The number of possible combinations is huge – in fact, there are currently over 90,000 possible pairs you can have, all of which you can access through your wallet.
If you are new to crypto, it is important to understand just what Crypto pairs are and why having so many options is useful.
Quite simply, pairing is the means by which you can trade one cryptocurrency for another via any crypto platform (such as Volta) without having to trade them for fiat currency, such as Pounds, Dollars, or Euros.
Without pairing, the only way to change one cryptocurrency for another would be to exchange one for fiat currency and then change that into the crypto you want, which would take longer and incur extra fees.
The pairing system is designed to prevent this, so with more than 90,000 available, the sky really is the limit on the range of different transactions you can undertake.
You may see a pairing represented by abbreviations for the currencies involved. So, for instance, if Bitcoin is paired with Tether, it would be written as BTC/USDT.
The benefit of this is that two cryptocurrencies can be valued in relation to each other, just as we have foreign exchange valuations on the Forex market between fiat currencies, which indicate, for example, how many US Dollars a Euro is currently worth.
Not only does this provide liquidity in the Crypto market, but it also means that a smart trader can boost the value of their Crypto stocks. Just as a Forex trader might sell one currency as it starts to fall in value to avoid a loss and exchange it for a more stable currency or one expected to rise in value, so Crypto traders can do likewise.
The analogy is not absolutely exact, of course. Pairing fiat currencies in Forex can see advantages gained when events occur in national (or in the case of the Euro, multinational) jurisdictions, such as central banks changing base rate levels.
Because most cryptocurrencies not tied to national currencies, (although Tether is linked to the US Dollar) this kind of differential usually does not arise. But even so, cryptocurrencies can and do fluctuate in value, not least against each other.
Be Ready For The Future
Of course, to some folk, a number like 90,000 might sound pretty vast compared to the limited number of fiat currencies in the world, and we certainly don’t recommend diving into trading with currencies you have only just heard of. As ever, you need to do some research and tap into expert knowledge, rather than taking random actions.
Just as nobody can say who will be the next big retailer, tech firm, or great sports team to emerge to prominence, it is impossible to predict which currencies will be thriving two, three, or five years from now, which will decline, or which will collapse altogether.
However, with a facility that allows so many possible pairings, you can take advantage once it becomes clear which of the 90,000 offers the best prospects.