Rumors of Bitcoin ETF approvals typically boost market liquidity by signaling potential regulatory acceptance, attracting institutional investors who prefer regulated investment vehicles. Increased liquidity manifests through higher trading volumes and tighter bid-ask spreads, as seen with past ETF-related developments. Investors often respond by increasing allocations to Bitcoin, anticipating price appreciation from institutional inflows. Strategies include buying spot Bitcoin or futures to front-run ETF launches, though cautious investors may hedge with options to mitigate volatility risks from unconfirmed rumors.