#Liquidity101 refers to how quickly and easily an asset can be bought or sold in the market without affecting its price. Highly liquid assets, like stocks of big companies or major cryptocurrencies, can be traded instantly with minimal price change. In contrast, illiquid assets, such as rare collectibles or low-volume tokens, are harder to sell quickly and may require price discounts. Liquidity is crucial in trading because it affects how fast you can enter or exit a position. Good liquidity ensures smoother transactions, tighter spreads, and lower slippage, making it a key factor in both stock and crypto markets.