#Liquidity101 Liquidity is the ability of an asset to be quickly converted into cash or another asset without causing a significant change in its market price. It is a key factor in financial markets, as it determines how easily traders and investors can buy or sell assets. Highly liquid assets, like major stocks or cryptocurrencies such as Bitcoin and USDC, have many active buyers and sellers, allowing for smooth and fast transactions. On the other hand, assets with low liquidity may be harder to sell quickly and may require accepting a lower price. Good liquidity reduces trading costs and risk, making it an important consideration for both individual and institutional participants in any market.