What is Liquidity for Cryptocurrencies?

Liquidity is the feature of how an asset can be swapped for another item with economic value by an individual or corporation. Usually, liquidity can be estimated by how fast some asset can be swapped to money. One asset has high liquidity when it can be converted quiclky to cash or vice-versa. A market’s liquidity has a big impact on how volatile the market’s prices are. Low liquidity usually results in a more volatile market and cause prices to change agressivily. Higher liquidity usually creates a less volatile market which prices don’t fluctuate much.