#Liquidity101
Liquidity refers to how easily an asset can be bought or sold without affecting its price. In high-liquidity markets, like major stocks or popular cryptocurrencies, trades happen quickly with minimal price changes. Low-liquidity assets, however, can be harder to sell and may require accepting lower prices. Liquidity is crucial for traders—it ensures smooth transactions, tighter spreads, and less slippage. Centralized exchanges often have higher liquidity due to more users, while decentralized ones may vary. Always consider liquidity before trading, especially with large amounts or in volatile markets.
