Illiquid in cryptocurrency refers to assets that are difficult to buy or sell without affecting the price significantly. This lack of liquidity can lead to large price fluctuations and make it challenging for investors to exit their positions quickly.
Illiquid cryptocurrencies typically have low trading volumes and limited market interest, which means there are fewer buyers and sellers actively participating in the market. As a result, it can be hard to find a counterparty to trade with at a desirable price.
This lack of liquidity can also make it risky for investors to hold illiquid assets, as they may not be able to convert them into cash easily in case of an emergency or market downturn. Illiquid cryptocurrencies are also more susceptible to market manipulation, as a small number of trades can have a disproportionate impact on the price.
Overall, illiquidity is an important consideration for investors in the cryptocurrency market, as it can impact the ease of trading, price stability, and overall risk profile of an asset.
