A cross rate expresses the value of one currency or asset in another using their prices against a common reference. In foreign exchange, the term often describes a currency pair that excludes the US dollar, with dollar quotes used to derive the relationship.
A crypto example
Assume simultaneous reference prices of 60,000 USD per BTC and 3,000 USD per ETH. Dividing 3,000 by 60,000 gives 0.05 BTC per ETH. The implied ETH/BTC rate is therefore 0.05. Inverting it gives 20 ETH per BTC.
These are hypothetical reference prices, with spreads, fees and price impact ignored. The calculation compares values; it does not require actually buying and selling the intermediate currency. Keeping units visible helps avoid reversing the numerator and denominator.
Reference rates versus executable prices
A directly traded pair can differ from the implied cross rate because of liquidity, bid-ask spreads, fees or quotes taken at different times. An apparent discrepancy is not automatically a realizable arbitrage profit.
Cross rates help compare trading pairs and translate portfolio values into a common unit. When using stablecoin quotes, the reference is that particular stablecoin; replacing it with USD silently assumes a dollar value that may not hold.