Why Liquidity Is Crucial for Your Crypto Portfolio
When building your crypto portfolio, liquidity should be one of your top priorities. Even if a coin’s price is soaring, lack of liquidity can leave you unable to sell when you need to. If there aren't enough buyers or sellers in the market, you might struggle to exit your position at a fair price, or worse, not be able to sell at all. This can be especially problematic in volatile markets, where prices can shift rapidly.
Always remember, liquidity is what allows you to move in and out of positions with ease. Coins with high liquidity—such as Bitcoin and Ethereum—ensure you can execute trades without major price slippage. By focusing on assets with solid liquidity, you're not just betting on price movement but also on your ability to quickly and efficiently capitalize on those moves when the time is right. Without liquidity, even the best investment can turn into a frustrating holding pattern.