Bitcoin ETF approval rumors can enhance market liquidity, drawing institutional and retail investors, boosting trading volume, and tightening spreads. This may stabilize prices and curb volatility, as past speculation often spiked Bitcoin’s value. Investors might increase long positions to leverage expected inflows, hedge with derivatives, or use a "buy the rumor, sell the news" tactic. Yet, regulatory uncertainty could lead cautious investors to hold cash or diversify until approval is confirmed.