1. Market Liquidity: Spot trading contributes significantly to market liquidity by facilitating the seamless exchange of cryptocurrencies, thereby enhancing price stability and reducing transaction costs.
2. Price Discovery: The continuous trading of assets on spot markets ensures transparent and real-time price discovery, reflecting market sentiment and fundamental factors influencing cryptocurrency valuations.
3. Risk Management: Traders utilize spot trading to hedge against volatility or lock in profits, employing various strategies such as limit orders, stop loss orders, and market orders to manage risk effectively.
