Bitcoin Weekend Trading Volume Hits Historic Lows Amid Market Changes in 2024
Bitcoin’s reputation, particularly in mainstream circles, is closely linked to its volatility. However, as of 2024, the once tumultuous weekend trading activity of the cryptocurrency appears to have significantly diminished, with trading volumes hitting their lowest point in history.
In 2019, weekends accounted for up to 28% of Bitcoin’s trading volume. Fast forward to this past year, and that figure has plummeted to just 16%, according to a recent report from cryptocurrency research firm Kaiko.
Several factors have contributed to this decline, one being the advent of spot Bitcoin ETFs. Although cryptocurrency markets operate globally and around the clock, ETF trading is confined to stock market hours during weekdays. Kaiko’s researchers noted that in the fourth quarter of 2023, following the launch of these ETFs, there was a marked increase in Bitcoin trading during the last hour of market activity, a period known as the benchmark fixing window.
“To closely mirror the benchmark price, Bitcoin transactions for ETF creations and redemptions must occur during the fixing window [from 3 to 4 pm New York time],” the report states. Since the introduction of spot Bitcoin ETFs, this window has emerged as the second most popular trading period for Bitcoin, but this trend is limited to weekdays.
Weekend trading, however, has been on a steady decline since 2021, now reaching its lowest historical level. While 6.6% of trading volume is concentrated in the benchmark window on weekdays, this drops to just over 4% on weekends.
The closure of crypto-friendly Signature and Silicon Valley Banks in March 2023 may also be a contributing factor to the reduced volatility. Both banks operated 24/7 networks that enabled market makers to execute substantial crypto orders, but since these networks shut down, market makers have been less inclined to offer liquidity in a low-volume environment, as reported by Bloomberg.
In the short term, Bitcoin’s price has remained relatively stagnant. Investors are closely monitoring inflation metrics and anticipating potential interest rate cuts from the Federal Reserve, according to previous reports from The Block.
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