#Liquidity101

Liquidity on the Binance platform is a fundamental and vital concept that describes how easily a digital asset can be converted into cash or another digital asset without significantly affecting its price. Simply put, the higher the liquidity, the easier, faster, and more efficient it is to trade assets.

What does liquidity mean on Binance?

Ease of buying and selling: In a liquid market, there are many buyers and sellers ready to execute trades. This means you can buy or sell the cryptocurrency you want very quickly, without having to wait long to find a counterparty.

Minimal impact on price Slippage when liquidity is high, the large trading volume ensures that large purchases or sales will not significantly affect the asset's price. For example, if you try to sell a large amount of a low liquidity coin, you may have to lower the selling price significantly to find buyers, resulting in price slippage.