Funding currency refers to the specific cryptocurrency used to support a trading position or investment strategy. It is the primary asset that traders use to fund their purchases of other cryptocurrencies or tokens.For example, if a trader uses Bitcoin to buy Ethereum, Bitcoin acts as the funding currency. This term becomes particularly relevant in exchanges where various pairs are available, allowing traders to choose which currency they want to use for transactions.The choice of funding currency can influence trading dynamics, costs, and market strategies. Different currencies may have varying liquidity, transaction fees, and volatility, all of which can impact the overall trading experience. Users often consider these factors when deciding which currency to use to optimize their investments.In summary, funding currency is essential for facilitating trades and investments, shaping how individuals engage in the broader market.