A simple but often misunderstood concept.
If Bitcoin has a one trillion dollar market cap and increases in value by 1%, then how much money has flowed into the asset? Many just blindly take market cap at face value and will outright declare that, "Ten billion dollars entered Bitcoin today." This statement is never accurate. Well, almost never, as this would imply that the multiplier was x1.
Where supply meets demand: markets are made.
The only entities that determine the price of an asset are the liquidity providers. Period. The End. That is all that matters. If the liquidity providers come to consensus today to increase the price of BTC to $100k, then that is exactly what is going to happen. Money doesn't have to enter or exit the market in order for the price to change. All that needs to change are the maker orders on the books. Apparently this is a very difficult thing for most to understand. Economies are complicated.
x10 to x100
The market cap multiplier is a variable number that changes based on market sentiment. It's very obvious that only a very small percentage of Bitcoin is for sale at any given time (HODL HODL HODL). Common sense would dictate that if only 1% of the supply is for sale in the moment, then pumping USD taker orders into those BTC maker orders is going to increase the market cap of BTC by $100 for every $1 that gets spent. This is the true nature of the multiplier.
The multiplier for Bitcoin is usually somewhere within the range of x10 to x100. Right now there's a lot of analysis to suggest that it's actually a tiny bit higher than x100 right now. The numbers show it could actually be something more like x110, which is clearly very high and reaching peak multiplier. Of course calculating this number is not an exact science and involves a ton of guesswork, but because ETF inflows are public data and being watched like a hawk x100 is a very good guess at this time.
This would mean even though the market cap of Bitcoin is $1T right now, it could easily double in price if as little as $10B flowed into the asset from a new source, which is pretty crazy to think about. However, as price goes up this incentivizes holders to come out and play the trading game, creating more dumping and sell-walls, which in turn reduces the multiplier to a more reasonable number.
The multiplier can be anywhere from x0 to x1000
On a technical level it can be even higher than x1000, but that wouldn't be a good thing. A network like Hive is much likely closer to x1000 because our liquidity is thin and it takes very little to pump or dump the spot price.
A multiplier of x1 means there's a perfect equilibrium between inflows and price, which is very rare indeed. In fact an x0 multiplier would be much more common than x1 because x0 is just a huge liquidity wall that can't be cracked. If a Hive whale was willing to spend $25M on Hive at a floor price of 10 cents then it would not be possible for Hive to go lower than 10 cents no matter how many tokens were dumped. After all, that would be 250M Hive which is more than half of the total supply.
Automated Market Makers change the game
Traditional order books force buyers and sellers come together, but the aptly named Uniswap created another way of doing business. Instead of allowing users to place maker orders at a particular level, all the assets within the pool are up for sale at any given time on a sliding curve. AMMs create a situation that produces exponentially more liquidity because users can't choose which price they buy and sell at. Everything within the LP is fair game.
Of course even AMMs are hugely prone to the multiplier effect because not all tokens exist within the LP, and even if they did there are often multiple LP pairs. For example, if there were 1000 Bitcoin in an LP and a matching $48M USDT on the other side then the math dictates that $48M added to the USDT side would extract 500 BTC from the other side, increasing the value of BTC by x4 within that pool even though the buyer only had to incur a 50% slippage cost.
So even in a market with exponential liquidity a bad actor can pump the MC at a massive discount. Orderbooks are much much worse than that. Whales can essentially buy low, buy medium, and buy high, and it looks like all their tokens are in profit on paper even though they can't be sold without the required exit liquidity. The real trick of manipulating markets is to trick other participants into being that exit liquidity.
This is an interesting trick that whales can use to manipulate markets.
When the entity in question has enough money to pull it off they can raise or lower the price of an asset and create momentum in their direction of choice. In fact sometimes they can accomplish such feats simply by leveraging the futures market and taking out debts using collateral to go long or short. As long as they don't get liquidated then it's all good.
Inflows vs Outflows
Even if the market multiplier is x100 and a bunch of money flows into the asset, that doesn't necessarily means number will go up. It's more of a representation of how much liquidity exists on the books. More often than not a high multiplier just means the spot price is extremely volatile (unless a new source of inflow is found like the ETF). One day the asset is up 30% but the next it's down 30%. It's easy to admit that this is the default state of crypto at large. Liquidity is thin even in the stock market, and crypto is a much smaller pond than that (with potentially even more greedy, degenerate, and unpredictable participants).
Conclusion
Markets are traded on the razor thin edge of buyers and sellers coming to an agreement on the books. It takes very little USD to pump or dump any given market, because the liquidity of USD is exponentially more robust than any particular market in question. We won't see Bitcoin be able to manipulate the value of fiat currency anytime soon. That would likely require the overall market cap to x1000 from $1 trillion to $1 quadrillion. Then again if BTC magically keeps going x2 every year this could actually happen in as little as a decade. Exponential numbers are a helluva drug. Food for thought.