As I delve deeper into investment, I keep hearing about "liquidity." Can someone explain what liquidity is and why it's important in markets?

Liquidity in financial markets refers to how quickly and easily an asset can be bought or sold in the market without affecting its price. High liquidity indicates a high volume of trading activity, meaning that transactions can be executed rapidly and at stable prices. This is crucial for traders who need to enter or exit positions without causing significant price changes. Liquidity is important because it impacts trading costs, speed, and ease, affecting overall market stability and efficiency. For a detailed explanation of liquidity, its impact on asset prices, and its importance in both traditional and crypto markets, this article offers thorough insights: https://paybis.com/blog/glossary/what-is-liquidity/ It provides insights into how liquidity works and why it is a critical factor in financial environments.