Traditional fiat currency - in the form of cash - is the perfect example of an extremely liquid asset, as it can be used to purchase goods and services directly. A house, on the other hand, is also a good example of a non-liquid asset; It can take months to find a buyer who is willing to pay the market price for it.
Slipping is basically a side effect of illiquidity. This is the difference between the expected price of an exchange house at the current market rate and the price at which the transaction is actually carried out. For example, someone may sell $ 1 million in a particular cryptocurrency at an exchange office, but if that person wants to do the trade quickly, they may have to sell part of the amount at a lower price than the market, since they simply do not There are enough buyers available at the last transaction price.
Many cryptocurrencies are easy to transfer around the world in seconds, but the vast majority of them are also extremely liquid. As Cryptowatch data shows, Bitcoin is without a doubt the most liquid cryptocurrency on the market, especially when Tether is excluded.
This is not a theoretical question. The slippage effects are manifested in various financial services related to cryptocurrencies. In 2017, BitPesa CEO Elizabeth Rosiello noted that she has to be practical in integrating new cryptocurrencies into her company, which has been providing Bitcoin liquidity to people and institutions in Africa since 2013.
Rosiello commented:
If you show me that everyone is using the cryptocurrency, that it is super liquid, that there is no slippage, that I have brokers in my six markets that are going to give me liquidity and they are going to give me a line of credit or whatever, let's do it . Elizabeth Rosiello, CEO of BitPesa.
On the online financial platform Uphold, the smallest altcoin exchange fees, such as Basic Attention Token or Chainlink, are almost double the bitcoin exchange fees.
Posted Using LeoFinance