$ETH Liquidity Simply

Liquidity refers to the ease of converting an asset into cash without significantly affecting its price. The higher the liquidity, the easier it is to buy or sell the asset quickly. For example, cash is the most liquid asset, while real estate and stocks may take time to convert into cash. In financial markets, good liquidity means many buy and sell orders, which contributes to price stability and reduces the differences between supply and demand. Understanding liquidity is essential for any investor or business owner looking to make smart financial decisions.