"Liquidity" refers to the ease with which an asset or investment can be bought or sold in the market, a measure of how quickly and easily an asset can be converted into cash.

In simpler terms, liquidity refers to how "liquid" or readily available an asset is. If an asset is highly liquid, it can be quickly sold or converted into cash without causing a significant change in its value.

On the other hand, if an asset is illiquid, it may take time and effort to find a buyer or convert it into cash, potentially resulting in a lower selling price.

Liquidity is an essential consideration for investors and traders as it affects the ease of buying or selling an asset and the ability to enter or exit a position without significant price impact.

Highly liquid assets are easily converted into cash, while illiquid assets may take more time and effort to sell or convert.

https://www.dbm.academy/faq for more blockchain vocabulary.

Like