This refers to the difference between the highest price a buyer is willing to pay for an asset and the lowest price a seller is willing to accept for the sale of that asset. The spread itself is a key indicator of the liquidity of an asset. In highly liquid markets, such as major cryptocurrencies like Bitcoin or stocks like Apple, the spread tends to be small because many buyers and sellers are actively trading, leading to tighter pricing. On the other hand, in markets with lower liquidity or more volatility, the spread can widen, meaning there’s a larger gap between what buyers are willing to pay and what sellers are asking for.
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