Question #140 ·
How have large whale trades and ETF inflows influenced Bitcoin market liquidity?
- Whale trades determine liquidity, while ETF inflows have no impact on Bitcoin trading conditions
- Large whale trades and ETF inflows increased liquidity by boosting volumes and narrowing spreads Right answer
- Whale trades and ETF inflows only affect long term prices, not immediate market liquidity
- Whale trades and ETFs reduced liquidity by causing erratic volume spikes and widening spreads
Why is this the correct answer?
This is correct because when whales move billions of dollars and ETFs like BlackRock’s IBIT facilitate large transactions, trading volume rises significantly. Higher volume typically narrows the gap between bid and ask prices, making it easier to buy or sell without large price impact, which is a sign of improved liquidity.