The mere whisper of Bitcoin ETF approval can dramatically enhance market liquidity, acting as a powerful catalyst for both retail and institutional participation. Retail investors, enticed by the prospect of a more accessible and potentially safer way to invest in Bitcoin, flood exchanges with buying orders, significantly boosting spot market liquidity. This increased activity attracts market makers, who provide tighter spreads and better execution quality. Simultaneously, the rumor signals potential legitimacy to institutional investors, who may begin allocating capital to Bitcoin-related products, including futures and options, in preparation for the ETF launch, adding liquidity to those markets as well. Investors’ strategies shift accordingly.