#Liquidity101 #Liquidity101

Liquidity is the ease and speed with which assets (such as stocks or real estate) can be converted into cash without a significant loss in value. A highly liquid asset, such as cash or gold, can be sold quickly and at a price close to its market value. On the other hand, a low liquidity asset, such as real estate, may take a long time to sell and might require a price reduction. Liquidity is important because it affects the investor's flexibility in making quick financial decisions. In the markets, high liquidity means there are a large number of buyers and sellers, which reduces price volatility. Good liquidity reduces risks and increases trading efficiency.$ETH