Even if each market participant holds a significant reserve of what – in normal times, at least – would be considered highly liquid assets, for the system as a whole the only truly liquid assets are cash and its equivalents.
The quantity of cash assets in the system at a point in time is, in turn, essentially fixed, being determined directly or indirectly by the central bank. Thus, whenever an investor sells less liquid assets to raise cash, the cash holdings of other market participants are reduced by an equal amount.