The rumor mill surrounding Bitcoin ETF approval can significantly alter market liquidity dynamics, often creating a short-term liquidity boom. The prospect of easier access attracts a wave of new participants, particularly retail investors looking to capitalize on potential price increases. This influx floods the spot market with liquidity, increasing trading volumes and order book depth. However, this surge is often accompanied by increased volatility, as the influx of new, often less experienced, traders can amplify price swings. Institutional investors, while potentially more cautious, may also begin positioning themselves, adding liquidity to futures markets or considering direct spot purchases. Investors’ strategies become varied.