๐๐๐ Weekend #BitcoinTrading drops due to TradFi institutions and spot #ETFs
The proportion of Bitcoin trading volume occurring on weekends has been steadily decreasing since 2018, and this trend has accelerated significantly since the introduction of spot #BitcoinETFs in the United States in early January, according to crypto research firm Kaiko.
Between 2018 and 2021, approximately a quarter of Bitcoin trading volume typically occurred on weekends. However, this figure has steadily declined, reaching just 13% so far in 2024, as noted by Kaiko on February 26.
Kaiko attributes this decline to several factors, including increased institutional participation in Bitcoin, which has led to decreased weekend market liquidity. Additionally, Kaiko points to challenges in market infrastructure, exacerbated by the mismatch between traditional financial institutions' operating hours and the needs of large crypto traders and market makers, given the 24/7 nature of crypto trading.
The research firm highlights the impact of the closure of several crypto-friendly banks in the United States, which has further complicated liquidity management on weekends.
While the decline in weekend trading volume is evident across both U.S.-based and offshore exchanges, offshore exchanges like Binance, HTX, OKX, Bybit, and Upbit still experience slightly higher weekend trading volumes compared to U.S. exchanges such as Coinbase, Kraken, and Bitstamp.
Offshore exchanges contribute to 15% of weekend trading volume, while U.S. exchanges represent 11%. Kaiko highlights liquidity disparities between U.S.-based Coinbase and Binance, noting increased trading costs on Coinbase since Q2 last year versus decreased costs on Binance.
Kaiko notes a notable increase in Bitcoin liquidity following the launch of spot Bitcoin ETFs in the U.S. However, they highlight a lack of weekend transfers between ETF issuers and exchanges, which could widen as issuers accumulate more Bitcoin.
Source - cointelegraph.com
