#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 high-liquidity 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 may require a price reduction. Liquidity is important because it affects the flexibility of the investor in making quick financial decisions. In markets, high liquidity means there are many buyers and sellers, which reduces price volatility. Good liquidity reduces risks and increases trading efficiency.$ETH