Illiquid Asset Liquidity

Definition ∞ Illiquid asset liquidity refers to the process of converting assets that are not easily or quickly convertible into cash without a substantial loss in value into more liquid forms. This often involves creating mechanisms or markets that improve the ease of trading such assets. Historically, assets like real estate or private equity have faced this challenge. Improving this aspect can unlock significant capital.
Context ∞ Blockchain technology and tokenization are significantly changing the discussion around illiquid asset liquidity. By representing fractional ownership of real-world assets as digital tokens on a blockchain, new secondary markets can be created. This allows for smaller investment increments and easier transferability, potentially increasing the market access and speed of exchange for traditionally difficult-to-sell assets. News often reports on projects tokenizing various asset classes to address this very issue.