means how easily an asset can be turned into cash without crashing its price — cash itself being the most liquid thing of all.

from From Latin 'liquidus' (flowing, fluid), via 'liquere,' to be liquid — the same family that gives us 'liquid' and 'liquor.' The financial sense borrows the metaphor wholesale: money that 'flows' freely is liquid, while a yacht or a building is 'frozen' or 'locked up' until someone melts it back into spendable cash. The accounting use of 'liquidity' as the cash-readiness of assets is a 19th- to early-20th-century development of that watery image.