What is liquidity in crypto? Why it changes the price you get
By SendPay Business · · 2 min read
Liquidity is how easily a coin can be bought or sold without moving its price much. A coin with lots of buyers and sellers is liquid; one with few is not, and trading it can cost more than the price on the screen suggests.
How to see liquidity
The order book shows the buy and sell orders waiting at each price. A deep book, with large orders close to the current price, means good liquidity. The spread, the gap between the best buy and best sell price, is usually small when liquidity is good.
Why low liquidity costs you
When there are few orders, a large trade eats through several price levels, so the average price you get is worse than the one you saw. This is called slippage. Wide spreads also mean you lose more the moment you buy.
How to check before you trade
- Look at the spread between the best buy and sell price.
- Check how much is on offer near the current price in the order book.
- Compare trading volume across the last 24 hours.
- Split a large trade or use a limit order to control the price.
Where SendPay fits
SendPay platforms let your customers buy, sell and hold crypto inside your own branded app, with assets held with regulated partners and a trading fee you set. SendPay tells you in writing which licences apply to your platform before you pay.
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Build my platform →Questions people ask
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Slippage calculator →Read next
This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.