Hello My Steemain Friends ,

Dear friends, I am @aviral123 from India. How are you all, I hope you all are well. I am fine too . Today I am sharing my post with you in this community. Earlier I shared information about "What is Crypto Liquidity, and what role does liquidity play in the crypto market." with you in my post . Hope you all will like my post. Today I will share with you " The liquidity of the Bitcoin and how the liquidity of Bitcoin is affected.". I want to share my thoughts about this with you all. let's start

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There are many types of facts which affect the price of Bitcoin. We can understand liquidity in simple words in such a way that the ability of an asset to be converted into cash value on demand is called liquidity. When the demand for a product increases in the market and with the increase in demand, sales increase, thus competition arises in the market.

Liquidity is essential for any tradable asset including the crypto currency Bitcoin. An illiquid market puts traders in a position from which it is difficult for traders to get out, whereas liquid markets are deeper and smoother. From where it is quite easy to enter and exit the market.

Based on statistics we see that in 2014 the daily volume of Bitcoin was less than $100 million per day, and sometimes this volume even fell below $10 million. Its daily volume exceeded $2 billion in 2017. Then its daily volume fell in 2018.

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Let's take a look at some of the main factors that affect Bitcoin liquidity. which are as follows:

Accept

Bitcoin has become more accepted in online shops, brick-and-mortar stores, and other businesses. Which can help in increasing its usefulness and reducing its volatility. The more it is transacted, the more liquid Bitcoin becomes. There was an increasing tendency for retailers to accept it. Then, the use of Bitcoin in retailers' transactions faced negative publicity related to crypto scams and price declines.

ATM and payment cards

Despite the constant fluctuations in cryptocurrency prices, the network of cryptocurrency ATMs was rapidly gaining momentum. Bitcoin ATMs also provide the facility to buy Bitcoins. So these ATMs are a great resource. Still, many people are afraid of online transactions lest they suffer any kind of loss. The importance of debit and credit cards in cryptocurrency is increasing day by day. Their use and trend is widely seen among the people. The launch of Bitcoin-to-cash payment cards and ATMs has significantly increased the utility and acceptance of Bitcoin.

Exchanges

Considering the importance of Bitcoin exchange, the increasing number of reliable Bitcoin cryptocurrency exchanges allowed more people to trade their coins. An increase in trading volume and frequency in the value of the Bitcoin currency helps increase liquidity.

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Rules

Every country has a different stance on Bitcoin, in some countries it is banned, in some it is allowed. And there is constant controversy over this. Big officials of countries keep an eye on its rules and the status of Bitcoin. There is no clarity on this yet despite the ambiguity on this front, the use of virtual currency is increasing, although slower than before. The authorities' clear stance on issues like taxation and consumer protection may generate more people's interest in transacting with Bitcoin currency. This is undoubtedly likely to have a positive impact on Bitcoin's liquidity.

Conclusion

Thus liquidity means that there is no discount or premium associated with an asset during the process of buying or selling it. It is a very easy process for an investor to enter and exit the market. Thus we understood that the higher the daily volume of an asset, the greater the liquidity of the cryptocurrency. There is liquidity in Bitcoin, but it is much less than in the currency trading market. Thus, better liquidity could help reduce the risks for Bitcoin.

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