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RE: Cryptocurrency Exchanges: A Brief Look at Centralized and Decentralized exchanges
Hello @eldecor
Sure :)
Liquidity in this setting means the volume or numbers of offers to buy and offers to sell. The larger the number of buyers and sellers, the better the prices and it’s easier to either buy something or sell something, and importantly get a good price. This situation is referred to as high liquidity .
In contrast, when there are few buyers it’s hard to sell, and the price the buyers are offering my be very low or a bad price. So not only is it hard to sell something, but you may have to sell it at a loss. The similar situation applies if there are few sellers. The price tends to be high or a bad price, so you pay more then you think is reasonable. This is referred to as low liquidity.
Wow! Quite interesting. I just learnt whales of stuffs today.
Guess I now know when to buy and when not to buy
I will sure follow you so I would be reading more of your awesome contents.
Thank you,