Liquidity In The Crypto Market #001

jueco (76)in Tron Fan Club • last year

Hello great minds,

It is a wonderful opportunity to come before you all to discuss on an important issue in the cryptospace.

I trust you are all doing perfectly fine and you are enjoying your activities in the community as you join hands with others to promote steemit across various social media platform, most especially on twitter.

It is another beautiful day and we shall be learning about liquidity in the cryptospace, please join me as we discuss about liquidity in the cryptospace.

A remarkable growth has been experienced in the cryptomarket since the invention of bitcoin in the year 2009

With the existence of thousands digital assets, the cryptocurrency market has become a global phenomenon that attracts both investors and ordinary individuals.

One critical concepts that contributes to the functionality of the cryptomarket is it's liquidity and we shall be learning about cryptocurrency liquidity.

WHAT IS LIQUIDITY

Cryptocurrency liquidity can be explained to be the ease to which digital assets can be sold or bought in the cryptomarket without significantly having an impact on the price.

Cryptocurrency liquidity shows the number of participants in the market, it shows the number of buyers and sellers in the cryptomarket.

The more participants there are in the market, the more liquid the cryptomarket is and the less participants there are in a market, the less liquid the market is.

When there are many active buyers and sellers, then it becomes easy for buying and selling (trading) to take place without a change in the price of the commodity.
And this is what is known as liquidity in the cryptomarket.

IMPORTANCE OF LIQUIDITY

There are several Importance of liquidity in the cryptospace and some of them will be explained below

FACILITATES TRADING:

Liquidity plays a big role in facilitating liquidity in the sense that traders can execute orders very easily and at a desired price, which makes it easier for an trade to be placed and exited.

When there are various buyers willing to buy your goods at your desired price, this makes trading very enjoyable for you and makes your trade gets executed swiftly.

PRICE STABILITY:

When there is fewer buyers and sellers in the market, the market is greatly affected by big trades from whales in the market.

And when the market is liquid, there are so many active buyers and sellers in the market and the trades of whales doesn't have effect on the price of commodities.