Bitcoin, once known for its around-the-clock trading accessibility, is experiencing a significant shift in trading patterns. According to a recent report by Kaiko, BTC weekend trading volumes have plummeted to historic lows, dropping from 28% in 2019 to a mere 16% in 2024. This decline is closely tied to the increasing influence of institutional investors in the cryptocurrency market, particularly with the launch of spot Bitcoin ETFs in the US.
The introduction of exchange-traded funds (ETFs) that mimic traditional stock market behavior has significantly impacted Bitcoin trading activity. These ETFs can only be traded during regular market hours, leading institutional investors to concentrate their trading activities on weekdays. The final hour of US stock market trading, known as the “benchmark fixing window,” has seen a surge in Bitcoin trading, indicating a new trend towards weekday trading.
In addition to ETFs, the closure of crypto-friendly banks like Signature and Silicon Valley Bank in March 2023 has also contributed to the decline in weekend liquidity. These banks provided infrastructure that allowed market makers to continuously place buy and sell orders, supporting weekend trading activity. Their absence has created a gap in weekend liquidity, further dampening trading volumes on Saturdays and Sundays.
Despite the decrease in weekend trading activity, there are potential opportunities for investors. The reduced weekend volatility could make Bitcoin a more stable asset, potentially attracting a new wave of institutional interest. Historical data also suggests that July could be a positive month for Bitcoin, with price increases observed in seven out of the past 11 years. However, the looming approval of Ethereum ETFs could introduce additional volatility to the market and potentially impact Bitcoin’s dominance.
The diminishing weekend trading activity signals a potential paradigm shift in the Bitcoin market. While weekends may no longer be characterized by high volatility, the coming months are expected to be eventful. Institutional investors are becoming key players in shaping trading patterns and ushering in a new era of stability in the cryptocurrency market. As the market continues to evolve, investors should brace themselves for potential fluctuations in the coming weeks.