#Liquidity101 In the world of crypto, liquidity is key. It's the ease with which you can buy or sell an asset without affecting its price. High liquidity is a sign of a healthy, stable market.

Role and Impact of Liquidity

High liquidity leads to more stable prices, faster trade execution, and lower transaction costs due to tighter bid-ask spreads. A major impact of low liquidity is slippage, which is the difference between the expected price of a trade and the actual price at which it's executed. This often happens with large orders in thinly traded markets.