Question #72 ·
How do large institutional inflows into Bitcoin ETFs affect its market price?
- Large institutional inflows significantly increase buying pressure which pushes Bitcoin prices higher through demand imbalance Right answer
- Large ETF inflows increase mining difficulty which reduces new Bitcoin issuance and slows network growth
- Inflows into ETFs temporarily inflate Bitcoin prices through artificial demand then correct once inflows halt
- Large inflows cause Bitcoin blockchain to slow down transactions and increase confirmation times significantly occasionally
Why is this the correct answer?
This is correct because when institutional investors pour billions into Bitcoin ETFs, they buy large amounts of Bitcoin. That increased demand compared to available supply drives the price higher. Beginners should know that in any market, heavy buying pressure from big players can shift prices up quickly if there isn’t enough supply to meet that demand.