Importance of Liquidity in Cryptocurrency Exchange Development
What is Liquidity? Liquidity refers to how easily an asset can be bought or sold at a stable price on a given market. The quicker you can sell off an asset as close to your asking price as possible, the more liquid an exchange is considered to be. How Cryptocurrency Exchanges Work? Cryptocurrencies are traded through either Centralized or decentralized exchanges. Those exchanges operate with a certain amount of buyers and sellers. The market Participants create the buying and selling through their bids. The Exchanges are also not trading at the same prices, but the price differences usually even out through simple market supply and demand. Exchanges offering certain options, such as leverage, the option to short or fiat trading pairs are in a great advantage. Additional drivers can include support for specific cryptocurrencies, where some exchanges specialize in supporting as many different cryptocurrencies as possible, while others support only a limited amount. ...