How Does an Asset’s “Quality” Influence Its Bid-Offer Spread?

An asset's quality, often proxied by its market capitalization, reputation, and perceived stability, directly influences its bid-offer spread. High-quality assets (like Bitcoin or major-cap stocks) are generally more trusted, trade with higher volume, and have greater liquidity, resulting in narrower spreads.

Lower-quality, less-established, or highly speculative assets carry higher risk and uncertainty, causing market makers to demand a wider spread.