#Liquidity101 Here is a summary of the provided text on liquidity, followed by flashcards:

Summary: Understanding Liquidity

Liquidity is a fundamental concept in finance that describes how easily and quickly an asset can be bought or sold without significantly affecting its price. Its importance varies slightly depending on the context:

In Financial Markets (including Crypto): Greater liquidity leads to more stable prices, less volatility, and efficient trading. This allows participants to enter and exit positions without causing large price fluctuations.