Cross-market liquidity denotes the ease with which an asset can be converted into cash across multiple distinct trading platforms or exchanges. In digital asset markets, this refers to the availability of buyers and sellers for a specific cryptocurrency across various centralized and decentralized venues. High cross-market liquidity allows for large trades without significant price impact. It signifies robust market depth spanning different trading environments.
Context
Enhancing cross-market liquidity is a constant objective for digital asset exchanges and decentralized finance protocols seeking to attract greater trading activity. A critical future development involves the advancement of cross-chain bridges and atomic swap technologies to unify liquidity pools. Discussions frequently center on regulatory fragmentation across jurisdictions, which can impede the free flow of liquidity between markets.
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