How do Bitcoin ETF inflows and outflows impact market liquidity and price trends?
Why is this the correct answer?
This is correct because when investors buy Bitcoin through ETFs, the funds must purchase BTC, adding liquidity and upward pressure on price. Conversely, ETF outflows involve selling Bitcoin to redeem shares, which creates selling pressure and can drive prices down. Understanding these flows helps beginners see how ETF demand affects market liquidity and trends.
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