Secondary Trading

Definition ∞ Secondary trading refers to the buying and selling of digital assets after their initial issuance. This market activity involves transactions of cryptocurrencies, tokens, or other digital assets between investors on various exchanges or peer-to-peer platforms, following their primary distribution or sale. It provides liquidity for asset holders, allowing them to realize gains or losses and enabling price discovery based on market supply and demand. The secondary market is where the majority of digital asset transactions occur.
Context ∞ Secondary trading is a fundamental component of the digital asset ecosystem, providing crucial liquidity and price signals for investors. Current discussions often focus on market efficiency, regulatory oversight of exchanges, and the impact of automated trading strategies. Future developments will likely involve the expansion of decentralized exchanges and more sophisticated trading instruments, aiming for greater transparency and accessibility in these markets.