Liquidity is a term used in the financial markets to describe the ease with which an asset may be converted into cash.
Liquidity is critical in commercial assets, including cryptocurrency, because the capacity to convert bitcoin to cash or other coins is significant.
When there is a lack of liquidity in the market, it produces volatility, which leads cryptocurrency prices to rise.
High liquidity, on the other hand, suggests a stable market with low price volatility.
As a result, because a liquid market has a larger number of players, it is easier to buy or sell cryptocurrencies. As a result, orders are processed more quickly.
Given the fast-paced nature of bitcoin markets, this essentially means that you can enter or exit trading at any time.
Because of the huge number of buyers and vendors on the market, high liquidity in the market is an excellent scenario since it allows improved pricing for everyone involved. A thriving market with a high degree of trade tends to generate more affordable and balanced market prices for everyone.
This is exactly why exchanges like CoinOvy that work on keeping your assets liquid are incredibly important for keeping a healthy market. Nobody likes manipulation.
4 thoughts on “The importance of Liquidity and why every exchange NEEDS to keep your assets liquid”
Nobody likes manipulation, which is why nobody likes being manipulated into reading a shill by what looks like a legitimate educational post.
Upset by liquidity risks? Try our DeFi OTC platform!
Other platforms also create liquidity. Like DEIP that creates liquidity for intangible assets
If you understand how important liquidity is to assets then you would know what a big solution ALBT LMaaS is in the DeFi ecosystem.