What insights do ETF inflows and outflows offer about institutional interest and Bitcoin liquidity?
Why is this the correct answer?
ETF inflows show that institutions are buying Bitcoin through regulated products, which increases available liquidity and can support price gains. Conversely, outflows mean investors are redeeming shares and selling Bitcoin, reflecting risk-off sentiment and applying downward pressure on price. For beginners, think of ETFs as a channel; money moving in bids prices up, while money moving out can lead to selling into the market.
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