Question #255 ·
What role do ETF inflows and outflows play in shaping Bitcoin’s market dynamics?
- ETF inflows and outflows are illegal transfers concealed as investments and often result in heavy fines and suspensions.
- ETF inflows and outflows only reflect investor mood and have no impact on Bitcoin price or market liquidity.
- ETF inflows add institutional capital, lifting Bitcoin demand and price, while outflows signal profit that can weaken momentum. Right answer
Why is this the correct answer?
This is correct because ETF inflows represent new institutional money buying Bitcoin through the fund, which raises demand and price. Conversely, ETF outflows mean the fund sells Bitcoin to pay redemptions, signaling profit-taking that can reduce buying pressure and slow price gains.