#Liquidity101

A liquid market has many buyers and sellers, allowing for quick crypto exchanges with minimal price variations. For example, Bitcoin (BTC) is very liquid because there is always a large volume of transactions.

In personal finance: It is the ability to convert your cryptocurrencies into fiat money (like USD or EUR) or into other cryptos without delays or significant losses.

In DeFi projects: Liquidity refers to the funds available in a pool (like on Uniswap) to facilitate token exchanges.

Types of liquidity

Market liquidity: The ease of buying or selling a cryptocurrency on an exchange. BTC and ETH are examples of high liquidity; a new token from a small project may have low liquidity.