It’s conventional financial wisdom to have a decent amount of liquid assets available in case of emergencies. You never want to be stuck in a health emergency, for example, with all your money technically growing, yet tied up in inaccessible accounts. A degree of liquidity is important, and in that same vein, so is accessibility. But how practical is that advice when it comes to cryptocurrency?
For the most common coins like BTC, liquidating your assets can be fairly easy. According to CryptoVantage, exchanges that generally have the most liquidity also “tend to be the exchanges with the highest trading volumes.” Unlike stocks, though, cryptocurrencies can be traded on a huge variety of exchanges, which typically means a lot of homework to find a liquidation rate comparable to the market price of a coin — i.e. liquidating with the least “slippage.”
So how can all that work over multiple exchanges be minimized to make for easier liquidation? For one, keeping your more liquid assets in one central place is a good place to start. For example, given that Bitcoin is a highly liquid coin, it will likely serve you well to keep your BTC holdings in a single wallet. This simplifies the liquidation process in case you suddenly need access to cash, and it also minimizes the associated fees.
Another tool you should be looking out for is a platform with multi-exchange trading and insights in one place. Especially if you’re looking to liquidate a certain altcoin, you’ll need to do coin-specific research about its current trading volumes across exchanges — usually including more specialized exchanges. Tools like Zelcore’s news aggregator are invaluable here. If liquidation is all about easy access, this kind of centralized viewing of updated coin info across exchanges makes it that much easier.
Like market-based forms of passive income, Cryptocurrency is often viewed as volatile and largely inaccessible. In layman’s terms, you’re sending your money off to live deep inside a chain of encryption. But getting to your assets, and liquidating in case of necessity, doesn’t have to be an uphill battle. With a centralized, multicurrency wallet and a reliable news aggregation tool, you can gather info quickly and make real-time decisions about how best to liquidate.
Looking to get started? Download the Zelcore app now and get access to your assets whenever you need them.
