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The ask price for a given asset is the minimum price for which someone is willing to sell that asset.
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The bid price for a given asset is the maximum price that someone is willing to pay for that asset.
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The bid-ask spread is the difference between the bid price and ask price for a given asset. This spread is the profit that market makers earn by buying and selling the asset on behalf of investors. As an asset’s liquidity increases, this spread decreases correspondingly.
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An exchange is a marketplace where people are able to buy and sell assets. The New York Stock Exchange (NYSE), for example, is a place where people are able to buy and sell stocks. In a similar way, there is an increasing number of cryptocurrency exchanges set up today. Some of the major exchanges include: Kraken (based in San Franciso), Gemini (Based in New York), Bitstamp (Based in Luxembourg), and Bitpanda (based in Viena).
All cryptocurrency exchanges are not created equal. Different exchanges let you buy and sell different cryptocurrencies, and some even include other assets such as precious metal (gold and silver); different exchanges set different prices for their listed cryptocurrencies; and different exchanges have different volumes of trades happening on them, which changes how easy it is to buy or sell cryptocurrency efficiently.
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The availability of liquid assets (ready to be bought or sold) to a market or company. For example, cash is a liquid asset. Liquidity may also refer to a high volume of activity in a market. For example, high buying and selling bitcoin during a bull market.