When rumors circulate about potential Bitcoin ETF approval, market liquidity often experiences a surge, driven by a combination of factors. The prospect of a regulated product lowers the barrier to entry for many investors, leading to a flood of new capital, particularly from retail investors eager to participate. This influx significantly boosts spot market liquidity, increasing trading volumes and order book depth. Simultaneously, the rumor signals potential legitimacy to institutional players, who might begin allocating capital to Bitcoin futures or other derivatives, adding liquidity to those markets as they position themselves for the ETF launch.