How Liquidity Affects Bitcoin
Liquidity refers to the ability of an asset to be converted to cash on demand. However, others also believe liquidity depends on the bid-ask spread. That assumption means an investment with a lower bid-ask spread will command higher liquidity. Therefore, liquidity stipulates no discounts or premiums are attached to an asset during its purchase or sale, enabling investors and traders to enter and exit trades quickly. The market’s competitiveness heightens whenever investors buy and sell more of an asset....