What are some examples of implicit costs in the cryptocurrency market?

1 answers

• Dec 28, 2021 · 3 years ago
  Implicit costs in the cryptocurrency market are a crucial consideration for traders and investors. One example of an implicit cost is slippage, which occurs when the execution price of a trade differs from the expected price. This can happen due to delays in order execution or sudden price movements. Traders need to account for slippage to ensure their strategies remain profitable. Another implicit cost is spread, which refers to the difference between the buying and selling prices of a cryptocurrency. Traders need to overcome this spread to make a profit. Lastly, liquidity costs can also be considered implicit costs. When there is low liquidity in the market, it can be challenging to buy or sell large amounts of cryptocurrency without significantly impacting the price. Traders and investors need to carefully consider these implicit costs when making trading decisions in the cryptocurrency market.
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