Liquidity

Share
Reading Time: < 1 minute

Liquidity refers to the easiness of an asset to be converted into cash and other assets without affecting its market price. In simpler terms, liquidity means you can easily get your money whenever you need it. The levels of liquidity are usually inherent in each assets utility and market activities.

In cryptocurrency, Bitcoin is considered the most liquid virtual currency as it is one of the most actively traded. In contrast, properties or rare goods are usually very illiquid as it took a long process to convert those assets into cash or other assets. The liquidity of cryptocurrencies is likely to increase furthermore if public-wide adoption becomes more common and its utility widens.

Explore Other Vocabulary ‚Üí