How to identify the most liquid cryptocurrencies and why this is needed
Despite the fact that the rate of cryptocurrencies has dropped significantly recently, interest in transactions in digital currency still remains quite high.
Some use cryptocurrencies in current calculations, while others consider the current decline to be the best option for investing in this category of assets.
At the same time, the main question facing each potential investor is “Which cryptocurrency should I invest in?”
In our case, one of the criteria for assessing the attractiveness of an investment asset is its liquidity; it is this indicator that affects the comfort of working with digital currency.
At the same time, we can say that the concept of cryptocurrency liquidity is much broader, since here, in addition to the price, the very possibility of selling a digital asset also plays a role.
How to assess the liquidity of a cryptocurrency:
• Speed of sale and purchase - how quickly a given asset can be converted into real money.
• Overhead costs – the amount of costs for exchange and withdrawal to a bank account.
• Participation in payments – how often you can pay with this cryptocurrency for goods and services.
• Presence in trading platforms - important when making money on speculative operations.
That is, in the end we can say that the liquidity of a cryptocurrency is determined by its demand.
The most liquid cryptocurrencies today:
Bitcoin is the leader in liquidity, it is accepted everywhere where cryptocurrencies are accepted, and this is not surprising because Bitcoin is the first digital currency.
Due to high liquidity, the exchange commission is the lowest here, which allows you to use Bitcoin for short-term speculation.
Ethereum has been holding the second position in the cryptocurrency market in popularity for several years now; it can easily be exchanged on any exchange.
This asset is also present in almost every crypto ATM, which means the fastest possible exchange for cash.
Tether – this type of digital money belongs to the so-called stablecoins; it is assumed that the exchange rate of such assets is as stable as possible.
Indeed, most of the time Tether is almost equal to the US dollar, thanks to this feature the cryptocurrency has gained its popularity. Mainly used for calculations.
Ripple – it is not known for what merits, but Ripple is one of the most liquid cryptocurrencies and ranks sixth in terms of capitalization.
Due to the fact that Ripley has been popular for quite a long time, it has firmly taken its place on stock exchanges and online exchange offices. At the same time, it can be exchanged for cash with low commissions.
Binance Coin is a cryptocurrency launched into circulation by the largest digital exchange, and actively advertised among its users.
Therefore, despite its relatively young age, Binance Coin can already be found almost everywhere where they work with digital currencies.
This is what the five most liquid cryptocurrencies look like today; they are best used for calculations or speculation on the exchange rate.