How Liquidity Affects Crypto Traders

Volatility is an unfortunate reality of the crypto market, which has raised concerns regarding its liquidity among traders worldwide. Cryptocurrencies reached a market cap of over $800 billion in January 2018, going on to decline rapidly in early 2018, only to rise once again and cross the $200 billion mark in September.

Liquidity is the ability of an asset to be converted into cash easily, without affecting the general stability of prices. Crypto traders are concerned about liquidity because digital currencies with higher liquidity rate are more comfortable to buy and sell since they have a significant number of interested traders. We need to keep in mind that liquidity is affected by the following factors: trading volume, cryptocurrency exchanges, the lack of regulations and acceptance of cryptocurrency by nations.

Benefits of Liquidity for Crypto Traders

· Fair Price to Traders

In a highly liquid market, prices are more reasonable to traders due to a large number of active buyers and sellers. A robust crypto market, with high trading activity, will ensure that sellers sell at competitive prices, while buyers buy at higher prices to not lose out on a trade, thereby creating an equilibrium.

· Market Stability

High liquidity ensures that prices remain stable and are not prone to wild swings due to large trades. Crypto giants, individuals or entities with extensive holdings of crypto assets, can influence prices, which can lead to increased volatility and risk for general traders. In a market with high liquidity, prices are stable enough to withstand such large trades.

· Quicker Transactions

It is easier and more convenient to buy and sell cryptocurrencies of your choice in a highly liquid market since buy and sell orders would be executed quickly due to a higher number of active traders. The time taken for the execution of a trade plays a vital role in a highly volatile market.

· Accurate Technical Analysis

Technical analysis means an evaluation of past prices and trends to predict future price movements. It is the most widely used technique to understand crypto trading. High liquidity enhances the accuracy of pricing and charting of cryptos, ensuring better-informed investment decisions.

The Liquidity Solution

The IronX crypto exchange has been developed with a specific focus on addressing liquidity concerns while making crypto trading simpler and more convenient for both beginners and experienced traders. The exchange is the result of a joint venture between IronFX Group, an award-winning global online trading platform with connections to top-tier financial institutions and EmurgoHK Group, the global leader in blockchain technology.

IronX Exchange Liquidity will be ensured by allowing clients to migrate their accounts to the IronFX online trading platform seamlessly and EmurgoHK Group will list its highly successful ADA coin.

The main idea is to provide the flexibility and already established convenience of the traditional platform and combine it with the latest developments in blockchain technology. Best-in-class banking and payment systems, together with the already-amassed significant IronFX Group assets, will make the IronX Exchange stand out from the rest.

IronX is regulated by the Estonian Financial Intelligence Unit and will provide a full range of traditional fiat and crypto wallet funding options. The exchange will be obtaining regulation from both Gibraltar and Malta.