Liquid biopsy for minimally invasive diagnosis and monitoring of cancer patients is progressing toward routine clinical practice. With the implementation of highly sensitive next-generation sequencing (NGS) based assays for the analysis of cfDNA, however, consideration of the utility of liquid biopsy for clinical genetic testing is critical. While the focus of liquid biopsy for cancer diagnosis is the detection of circulating tumor DNA (ctDNA) as a fraction of total cell-free DNA (cfDNA), cfDNA analysis reveals both somatic mosaic tumor and germline variants and clonal hematopoiesis. Here we outline advantages and limitations of mosaic and germline variant detection as well as the impact of clonal hematopoiesis on liquid biopsy in cancer diagnosis. We also evaluate the potential of cfDNA analysis for the molecular diagnosis of monogenic mosaic disorders.