What is Spot trading?
Most of the digital asset transactions we usually come into contact with use USD to price digital assets such as Bitcoin and Litecoin.
Then using USD to price Bitcoin forms a BTC/USD transaction pair (using one asset to price the other an asset, a trading pair is formed).
The price of this transaction pair represents how many units of USD you need to pay to buy 1 unit of Bitcoin, or how many units of USD you can get by selling one unit of Bitcoin.
So what if Litecoin is priced against Bitcoin? In other words, how much is a Litecoin worth? Spot trading refers to exchanging one digital asset for another.
For example, using BTC to price LTC will form a LTC/BTC transaction pair.
The price of this trading pair represents how many units of BTC you need to pay to buy 1 unit of LTC, or how many units of BTC you can get by selling 1 unit of LTC.
For example: when the opening price of the BKEX website is 1LTC=0.0099BTC, one Litecoin is 0.01 Bitcoin.
At present, there are 2 areas in the BKEX Spot trading area, namely: ETH trading area and USDT trading area.
What is the difference between Spot transactions and traditional legal Spot transactions?
The traditional digital asset transaction is the exchange between digital assets and USD.
When buying Bitcoin with USD, the Bitcoin rises, and you can use Bitcoin to exchange for more USD. Otherwise, the convertible USD will change.
For example: when 1BTC=30,000 yuan, buy 1BTC, sell it when the bitcoin rises to 40,000 USD, and then exchange 1BTC for 40,000 USD.
In BKEX Spot transactions, USDT is equivalent to the position of USD. For example: when 1ETH=0.1USDT, buy 1ETH with 0.1USDT, sell when ETH rises to 0.2USDT, 1ETH can be exchanged for 0.2USDT.
Advantages of Spot transactions
- Reduce the cost of switching currencies
- Provide arbitrage opportunities within the platform
- Stronger anonymity
- More convenient conversion and circulation between digital assets
In traditional digital asset transactions, digital assets are priced in USD.
That is to say, if I hold Bitcoin and want to exchange it for Ethereum, I need to sell BTC first, pay a handling fee, and then buy ETH , pay the handling fee again.
After changing hands twice, the handling fee cost will be doubled.
And through Spot transactions, it is convenient, quick and cost-effective to directly exchange BTC for ETH.
How are Spot transactions priced?
Like the traditional fiat currency exchange for digital assets, the market price of Spot transactions is also determined by supply and demand.
The market price of Spot transactions changes according to changes in market supply and demand forces.
If the buyer’s power is greater than the seller’s power, the price of the transaction pair will rise; if the seller’s power is greater than the buyer’s power, the price of the transaction pair will fall.
For example, if more people are willing to exchange their Bitcoins for Litecoins in the market, the supply of Litecoins will be in short supply, which will cause the price of LTC/BTC trading pairs to rise, that is, more Bitcoins are needed to exchange one Litecoin.
Please check BKEX official website or contact the customer support with regard to the latest information and more accurate details.
BKEX official website is here.
Please click "Introduction of BKEX", if you want to know the details and the company information of BKEX.
Comment by Hans
April 24, 2024
as I am trading here various assets, for me it's the most important feature. i mean, flexibility in tradable markets. i alternate trading styles, meaning that sometimes I trad...