Bitcoin BTC
+1.25%
‘s reputation is almost synonymous with volatility, at least in the mainstream. But the once wild cryptocurrency weekends may be a thing of the past. In 2024, weekend trading volumes fell to the lowest levels in Bitcoin history.
A new report from cryptocurrency research firm Kaiko shows that up to 28% of Bitcoin trading volume took place on weekends in 2019, compared to just 16% last year.
The report identifies several factors contributing to the decline, including the launch of a spot Bitcoin ETF. Although cryptocurrency markets are available globally at any time, ETF trading only takes place during the week when the stock markets are open. In the fourth quarter of 2023, when these products were launched, Kaiko researchers observed an increase in the share of Bitcoin traded during the final hours of market trading, known as the benchmark holding window.
“To reflect the benchmark price as accurately as possible, Bitcoin buys and sells should occur during a fixed time period (3 p.m. to 4 p.m. New York time),” the report states. Since the launch of the spot Bitcoin ETF, that time period has become the second most popular time for Bitcoin trading, but the effect has only been observed during the week.
However, weekend trading has been steadily declining since 2021, and the metric is now at an all-time low. During the week, 6.6% of trading occurs during the benchmark period, but on weekends, that percentage drops to 4%.
Another factor in the low volatility could be the closure of cryptocurrency-friendly Signature and Silicon Valley banks in March 2023, according to a Bloomberg report. Both banks operated networks 24/7, allowing market makers to place large buy and sell orders for cryptocurrencies, but since those networks were shut down, market makers have been less willing to provide liquidity in a low-volume environment. Yes.
The Block previously reported that Bitcoin prices have been stagnant in the short term recently as investors closely watch inflation data in anticipation of a final Fed cut.
Disclaimer: The Block is an independent media outlet providing news, research and data. As of November 2023, Foresight Ventures is The Block’s largest investor. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful and timely information about the cryptocurrency industry. Below are our current financial disclosures:
© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not provided or intended to be legal, tax, investment, financial or other advice.