Bitcoin’s weekend trading volume has tanked to its lowest level in 2024, a dramatically divergent trend from when cryptocurrency experienced constant price fluctuations. The claim comes as part of a landmark report by cryptocurrency market data researcher Kaiko, which reveals that just 16% of Bitcoin trading now takes place at weekends, down from the 28% seen in 2019.
Unquestionably, no one has caused this astronomical fall for more than one reason. The launch of spot Bitcoin ETFs made significant contributions, changing trading dynamics forever. As opposed to global crypto markets’ standard 24/7 trading hours, ETFs adhere to traditional stock market practices and are only executed during the weekdays. Introducing these new products in Q4/23 made this most noticeable.
Kaiko researchers discovered that Bitcoin trading volume would often spike during the one-hour window, known as a benchmark fixing in market parlance between 3 and 4 p.m EDT. The report explains, “In order to best reflect the benchmark price, Bitcoin purchases and sales for creations and redemptions would need to be executed at or around the Fixing Window.” As a result, this window has become the second most favored time for trading Bitcoin on weekdays.
Despite this rise in weekday activity, weekend trading has decreased since 2021 and is currently at its lowest point since past lows. On the other hand, 6.6% of trading happens during the weekday benchmark window, compared to slightly more than four percent over weekends. A more recent blow to weekend trading volume comes from the United States, where regulators forced Signature and Silicon Valley banks (both crypto-friendly) to close their doors for good by March 2023.
Previously, these banks maintained 24/7 networks that enabled market makers to trade major crypto buys and sell. The rides have been shut down by the market makers, who just sustain low volume, which then compounds with a shortage of weekend activity, so less liquidity is provided to their traders for even longer periods.
However, there is a silver lining. This shift in trading to weekdays has contributed to an increase in price stability, particularly during weekends. This is in contrast to the notoriously turbulent crypto-asset weekend, which could result in large volumes and significant shifts within short time frames. This decrease in volatility stands out against yesteryear when weekends were frequently characterized by abrupt price changes.
As Bitcoin trading aligns with standard market hours, it is becoming more similar to the behavior of large financial institutions that trade gold and other traditional assets on these exchanges. This could lead to increased mainstream interest and investment, which is expected to grow significantly. This mirrors a larger development in the cryptocurrency space, brought on by spot Bitcoin ETFs and improved market infrastructure.