Bitcoin Liquidity

What is Liquidity?

“Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price,” explains Investopedia. “In other words, liquidity describes the degree to which an asset can be quickly bought or sold in the market at a price reflecting its intrinsic value. Cash is universally considered the most liquid asset because it can most quickly and easily be converted into other assets. Tangible assets, such as real estate, fine art, and collectibles, are all relatively illiquid.”

Bitcoin Liquidity

So then, where does Bitcoin fit into the equation?

Supply and Demand

Most of this boils down to supply and demand. The sell spread will be lower (and the item more liquid) if the product is in demand. Fiat currency is very liquid because it’s always in demand and always worth a given value or price.

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Coin Cloud

The world’s leading operator of two-way Digital Currency Machines (DCMs), more advanced Bitcoin ATMs.