Illiquid assets

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Liquidity refers to the ease with which an asset can be bought or sold or “liquidated” – turned into cash. The term can be applied to all financial markets.
One of the most important characteristics of an asset is the speed with which it can be converted into cash.

What is a liquid asset?

A liquid asset is an asset that can be sold quickly without significant loss of value.
For example, bank account balances are liquid assets. Most stocks are also considered liquid assets as they can be turned into cash quickly on a readily available market.

What is an illiquid asset?

An illiquid asset cannot be disposed of quickly, is difficult to dispose of or cannot be disposed of without suffering a significant loss. Examples of illiquid assets: real estate, works of art, private company interests and certain types of debt instruments. Crypto currencies are very liquid assets today, but there was a time when liquidity in this type of instrument was hard to find.