$ETH Liquidity Simply

Liquidity refers to how easily an asset can be converted to cash without significantly impacting its price. The higher the liquidity, the easier it is to sell or buy 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 a lot of buy and sell orders, contributing to price stability and reducing the spreads between supply and demand. Understanding liquidity is essential for any investor or business owner looking to make smart financial decisions.