Recent reports from Kaiko, a cryptocurrency research firm, indicate a significant decline in Bitcoin’s weekend trading volume. This year, the proportion of Bitcoin traded over weekends has fallen to an all-time low of 16%. This drop is linked to the approval of spot Bitcoin ETFs, which has influenced investor behavior to align with traditional equity exchange schedules.

Bitcoin’s volatility, a key characteristic of the cryptocurrency, has also decreased. In the past, Bitcoin was known for wild variations during weekend trading. However, this trend has changed, with weekend trading volume dropping from a high of 28% in 2019 to current lows.

Impact of Spot Bitcoin ETFs

Spot Bitcoin ETFs, launched in January, have played a significant role in this shift. Following the ETF launch, Bitcoin’s price surged to a new all-time high, and despite some retracement, it remains up about 45% this year. Unlike other cryptocurrencies that trade non-stop, spot Bitcoin ETFs follow traditional stock trading schedules with no weekend trading.

Kaiko observed that Bitcoin trading on weekdays, particularly between 3 p.m. and 4 p.m., has increased. This time frame, known as the standard fixing window, is when ETF owners determine Bitcoin’s price to calculate the ETF’s net asset value. The proportion of Bitcoin traded during this window increased from 4.5% in the fourth quarter of 2023 to 6.7%.

Factors Contributing to Decline in Bitcoin

Several factors have contributed to the decline in weekend trading volume, including the launch of spot Bitcoin ETFs. Crypto markets operate globally anytime, but ETF trading occurs only during stock market hours. Consequently, the standard fixing window has become a popular time for Bitcoin trading on weekdays.

Another factor is the closure of crypto-friendly banks such as Silicon Valley Bank and Signature Bank in March 2023. These banks operate 24/7 networks that allow market makers to place large buy and sell orders for crypto. With the closure of these networks, market makers are less inclined to provide liquidity during low-volume periods.

Decrease in Bitcoin’s Volatility

Bitcoin’s reputation for volatility, especially during weekends, has diminished. In 2019, up to 28% of BTC trading occurred on weekends. This year, the figure has dropped to 16%. Kaiko’s report highlights that weekend trading has been consistently declining since 2021.

The launch of spot BTC ETFs has influenced trading patterns. The benchmark fixing window, between 3 and 4 p.m. New York time has become the second most popular time for Bitcoin trading. This effect is only observed on weekdays, as weekend trading volumes remain low.

Impact of Bank Closures on the Crypto Market

The closure of Silicon Valley Bank and Signature Bank has also impacted BTC weekend trading volume. Both banks provided 24/7 payment networks that facilitated real-time crypto transactions. With these networks no longer operating, market makers have reduced liquidity provision during weekends.

Additionally, Bitcoin’s recent price reduction is attributed to investors closely monitoring inflation metrics and expecting potential interest rate cuts from the Federal Reserve. This has contributed to the overall reduction in trading activity.

Future Outlook for Bitcoin Trading

The future of BTC weekend trading remains uncertain. The influence of spot Bitcoin ETFs and the closure of key crypto-friendly banks have significantly changed the trading landscape. As investors continue to adjust to these changes, the patterns observed this year may continue.

Kaiko’s report clearly shows the current state of BTC trading. The shift in trading volume and the decrease in volatility are significant developments. These changes reflect broader trends in the cryptocurrency market and highlight the impact of regulatory and institutional factors on trading behavior.

BTC weekend trading volume has reached historic lows. The launch of spot BTC ETFs and the closure of critical banking networks have played crucial roles in this decline. These factors will likely influence future trading patterns and instability as the market evolves.

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