What is Crypto Liquidity?

Created by Ryan D, Modified on Wed, 24 Jan 2024 at 07:06 PM by Ryan D

Liquidity in crypto converts one crypto asset to another crypto asset or cash without significantly affecting the original asset’s value.

An example of liquidity is when you exchange US dollars for an asset. Since the US dollar is accepted widely, making it highly liquid, the transaction does not affect the value of the original asset (the US dollar).

When applied to the crypto trading market, liquidity is the ability of a crypto exchange to rely on liquidity pools to fulfill all buy and sell orders without delaying any trades or significantly affecting the price of the traded assets.

Read more about crypto liquidity here. 

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