Kaiko reports BTC weekend trading volume has dropped to a 16% all-time low.
The trading volume drop aligns with the schedule of ETF issuing companies.
Bitcoin’s volatility drop aligns with the collapse of crypto-friendly banks in 2023.
According to reports from the cryptocurrency research firm Kaiko, the proportion of Bitcoin traded over weekends has declined to an all-time low of 16% this year. Kaiko’s report linked the drop to the approval of spot Bitcoin ETFs, which has skewed investors’ trading behaviors to align with the schedules of the ETF issuing companies, mainly traditional equity exchanges.
The proportion of Bitcoin traded over weekends has declined to an all-time low of 16% this year, according to cryptocurrency research firm Kaiko https://t.co/S40eeHNWzg
— Bloomberg Crypto (@crypto) June 29, 2024
Kaiko also highlighted a drop in Bitcoin’s volatility, one of the original traits of the flagship cryptocurrency. With Bitcoin trading extending into the weekend, including Saturdays and Sundays, the digital asset was renowned for wild fluctuations during such periods in the past.
According to Kaiko, Bitcoin’s weekend trading volume has dropped, falling from its 28% high since 2019. Despite following a gradual reduction over the years, Bitcoin’s weekend trading volume declined swiftly this year, and Kaiko’s Senior Analyst, Dessislava Aubert, blames the ETFs for this decline.
It is worth noting that the spot Bitcoin ETFs launched in January this year have impacted Bitcoin significantly. BTC surged after the ETF launch, with the flagship crypto’s price rallying to a new all-time high. Despite making a notable retracement, the pioneer cryptocurrency is still up about 45% this year.
However, unlike other cryptos that trade non-stop, including on weekends, spot Bitcoin ETFs follow the trading schedule of traditional stocks. Hence, no trading over the weekend. Following the schedule’s implementation, Kaiko observed that the proportion of Bitcoin traded on weekdays between 3 p.m. and 4 p.m. increased to 6.7% from 4.5% in the fourth quarter of 2023.
The research firm noted that the highlighted time frame is the period known as the benchmark fixing window when the owners of the ETFs determine the price of Bitcoin and then use it to calculate the ETF’s net asset value. Kaiko also observed a connection between the collapse of Silicon Valley Bank and Signature Bank in March 2023 and the drop in BTC’s weekend trading volume. I noted that market makers can no longer use the banks’ uninterrupted payment networks to buy and sell crypto in real time.
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