Rumors of Bitcoin ETF approval can significantly boost market liquidity by attracting institutional and retail investors, increasing trading volume, and narrowing bid-ask spreads. This heightened activity often stabilizes prices and reduces volatility over time. Investors may respond by adopting strategies such as increasing exposure to Bitcoin through futures or spot markets, hedging with options to manage risk, or diversifying portfolios to capitalize on potential price surges. Some may also engage in arbitrage, exploiting price differences between ETFs and underlying assets, while cautious investors might wait for confirmation to avoid premature moves.