Leonardo
Mon Jul 08 2024
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7 answers
1589
Do cryptocurrencies become less efficient as liquidity increases?
As a financial practitioner, I'm curious about the impact of liquidity on cryptocurrency efficiency. Does the increase in liquidity lead to a decline in the efficiency of these digital assets? With the growing popularity and adoption of cryptocurrencies, liquidity markets have expanded significantly. However, does this expansion necessarily come with trade-offs in terms of transaction speed, cost, or security? Are there any empirical studies or data that can shed light on this question? I'm interested in understanding whether higher liquidity necessarily makes cryptocurrencies less efficient.
