Submit a ticket My Tickets
Login  Sign up

What is Liquidity?

Liquidity generally refers to the ease with which cash can exchange an asset without affecting the price. This definition has two aspects: ease (speed and effort required) and price (slippage, or the difference between the expected price and executed price, on a large order).

When considering liquidity within the context of crypto exchanges, both components are critical — a trader needs to have transactions completed as quickly and cost-effectively as possible.

Beyond liquidity for a specific asset, we also talk about market liquidity, which deals with the overall market's health, such as a city's real estate market or the crypto market. A liquid market is one in which assets can be easily bought and sold at stable, transparent prices.

Did you find it helpful? Yes No

Send feedback
Sorry we couldn't be helpful. Help us improve this article with your feedback.