When you talk about liquidity in trading, in no way does it refer to thirst, the ocean, or anything like that? Liquidity is a technical term that describes a very important factor in the crypto and financial industry.
What is Liquidity?
Liquidity indicates the level of activity within that market that promises us efficiency — an important aspect of buying and selling cryptocurrencies (or other assets). Efficiency allows brokers, dealers, and platforms to quickly fulfill buy and sell orders for the best price available in the market. Both liquidity and efficiency are best facilitated within a large trading market, with a large base of buyers and sellers.
eToro offers its users a highly active marketplace with more than 10 million users from 140 countries. Such an active and rich marketplace offers deep liquidity.
Ease of trading
Liquidity means there is enough activity that whenever we wish to buy or sell there will be someone on the other side that is ready to make a deal with us. Efficient and swift buying and selling will enable us to better control our investments and adjust our portfolio whenever we need to.
eToro has precisely these features: millions of users around the world and non-stop trading, 24/7. On top of that, eToro collaborates with other exchanges and with market makers, promising a large pool of traders. Leading technologies used by eToro for fast and efficient trading further increase the volume of liquidity.
In a liquid and efficient market, when we make an order to buy or sell an asset, we don’t affect the asset’s price (the professional term for that is “slippage”). That’s because there is sufficient equilibrium between buyers and sellers so we can trade and get a good price without affecting the market or asset price.
eToro offers traders good prices. This is achieved in large part to the deep liquidity pool, but there’s much more to it.
Besides great prices, eToro promises zero fees as well as a fixed spread of the price between sellers and buyers – unlike other crypto exchanges. In addition, traders can start investing and trading with a small amount and still get the benefits of using the platform of a large company.
Why Liquidity is important for the crypto market
The crypto market is probably the most unique capital market in the world. It is a hyper-dynamic arena, which is one reason for its fast growth and enormous success over the last decade. It operates 24/7, 365 days a year, across the globe with millions of investors and traders.
As a decentralized marketplace, anyone, anytime, can buy and sell every cryptocurrency currently traded. But as this is a developing market, its level of activity is also growing. Therefore, liquidity and a vast and available scope of buyers and sellers are the essences of successful investment and trading. It isn’t a coincidence that you can hear discussions about liquidity throughout crypto social networks.
When dealing with the major cryptocurrencies, like bitcoin and ether, we’ll face relatively high levels of activity and deep liquidity. But many cryptocurrencies have liquidity challenges. Along with that, we should remember that low activity might encourage manipulations in trading and pricing, which is low liquidity could cause market swings. This is another issue that should encourage traders to search for an investment firm or trading platform with deep and flowing liquidity.
With eToro, you have access to the major cryptocurrencies of the market; assets that have been carefully chosen by investment experts so you can trade with maximum stability and efficiency.
Trading with deep liquidity
To conclude, after realizing the importance of deep liquidity, the best way to ensure you have access is to carefully choose a crypto trading platform, one that boasts deep liquidity, a rich and active user base, and a wide choice of assets, like eToro. This choice will determine the source and availability of liquidity for your investments.
There are many crypto exchanges and brokerages out there, but only a few have the experience and capabilities to promise the best conditions. The best trading platforms attract enough buyers and sellers to create an active marketplace. Professional and experienced managers also know how to conduct efficient trading mechanisms and use advanced technology to enhance liquidity and maintain stability.
eToro offers a unique opportunity to enjoy a deep liquidity pool, with millions of users, competitive and lucrative pricing, extensive collaborations, and advanced technology.
Disclaimer: This is a paid post and should not be considered as news/advice.