Weekend Bitcoin Trading Faces Significant Decline

The Weekend Shift in Bitcoin Trading: A New Era?

The landscape of Bitcoin trading is undergoing significant transformation, particularly as the allure of weekend trading appears to diminish. As reported by Kaiko, a leading crypto market research firm, the data reveals a concerning trend: only 13% of Bitcoin transactions have occurred on weekends in 2024. This decline from 17% in 2023 and a notable drop from 24% in 2018 raises important questions about the future of cryptocurrency trading when traditional markets are dormant.

Key Insights from Kaiko's Research

• Declining Weekend Activity: The percentage of Bitcoin transactions occurring on weekends has decreased significantly, indicating a shift in trading patterns.
• Liquidity Challenges: The research highlights deteriorating liquidity conditions during weekends. This is largely attributed to increased institutional participation and less robust market infrastructure.
• Historical Volume Comparison:
  • Weekend BTC USDT trading volume was 11 million BTC last year, down from 15 million BTC in 2022.
  • BTC USD trading volume reached a historic low of 2 million BTC in 2023, less than half of the volume in the previous three years.

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Institutional Influence and Market Dynamics

With traditional financial institutions shuttered on weekends, liquidity management becomes increasingly challenging for large crypto holders and market makers. Kaiko pointed out that these challenges intensified following the closure of several crypto-friendly banks in March 2023. Coinbase, a prominent U.S. exchange, faced heightened trading difficulties on weekends compared to its international counterpart, Binance.

Notable Trends in Trading Costs

• Widening Bid-Ask Spread: The average bid-ask spread on Coinbase has expanded since Q2 2023, suggesting that weekend liquidity has worsened.
• Geographic Disparities: Only 11% of Bitcoin volume in the U.S. occurred over weekends, in contrast to 15% in offshore markets. This discrepancy underscores the variances in trading habits across different regions.

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The Impact of Bitcoin Spot ETFs

The recent approval of Bitcoin spot ETFs, including those managed by BlackRock and Fidelity, is transforming the trading landscape. These funds have achieved record daily volumes, primarily during stock market hours. However, this shift also means that activity is largely absent over weekends, potentially widening the gap in trading volumes between weekdays and weekends.

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The interplay of these factors suggests that the decline in weekend trading may not just be a temporary blip but rather a sign of a larger structural change in the crypto market. As the influence of institutional players grows and the market adapts to new investment vehicles, the very nature of Bitcoin trading may evolve, leaving weekends as a quiet period in an otherwise bustling market. For those eager to capitalize on these opportunities, The Crypto Trader: How anyone can make money trading Bitcoin and other cryptocurrencies is a must-read.