bitcoin has long been a hallmark of cryptocurrency markets, thriving on the back of its 24/7 accessibility. Weekend trading, once a notorious breeding ground for volatility, has been especially significant in the cryptocurrency landscape.
However, a recent report from Kaiko reveals a not-so-rosy picture – btc btc-etfs-impact-on-spot-market-structure” target=”_blank” rel=”nofollow”>Weekend trading volumes have plummeted to historic lows, which could mark a new era dominated by institutional warriors during the week.
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bitcoin trading activity takes a nap
btc-etfs-impact-on-spot-market-structure” target=”_blank” rel=”nofollow”>Kaiko Data The answer is simple: bitcoin weekend trading activity has dropped dramatically, from a high of 28% in 2019 to just 16% in 2024. This dramatic decline coincides with the highly anticipated launch of bitcoin ETFs. spot in the U.S. These exchange-traded funds, which mirror the performance of stocks, can only be traded during traditional market hours.
The influence of institutional investors, who tend to favor these regulated products, is evident. The report highlights an increase in bitcoin” target=”_blank” rel=”nofollow”>bitcoin trading activity during the “benchmarking window,” the last hour of trading in the U.S. stock market. This suggests that institutions are shaping new trading patterns, prioritizing weekdays over once-active weekends.
Beyond the weekends: a multifaceted market transformation
The decline in activity over the weekend is not solely due to ETFs. The closure of crypto-friendly banks such as Signature and Silicon Valley Bank in March 2023 is another contributing factor. These institutions provided a 24/7 infrastructure that allowed market makers to constantly place buy and sell orders. Their absence has created a liquidity vacuum over the weekend, further dampening trading activity.
However, the changing landscape is not all doom and gloom. The report offers a ray of hope for investors seeking stability. The weekend's lower volatility could make bitcoin a more predictable asset, which could attract a new wave of institutional interest. Furthermore, the historical trend suggests that July could be a positive month for bitcoin, as price increases were seen in seven of the last 11 Julys.
Nervousness on the horizon?
While the weekend trading scene may be calming down, the next few weeks look somewhat turbulent for the cryptocurrency market. The possible approval of technology/us-regulators-could-approve-spot-ether-etfs-launch-by-july-4-sources-say-2024-06-26/” target=”_blank” rel=”nofollow”>ethereum ETF could further drive institutional participation and potentially impact bitcoin dominance.
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The road ahead
The decline in weekend trading activity signifies a potential paradigm shift in the bitcoin market. While once-volatile weekends may become a relic of the past, the coming months promise to be eventful.
Institutional investors are now in the spotlight, shaping new trading patterns and possibly ushering in an era of greater stability. However, this month could still introduce significant volatility, which would keep investors on edge.
Featured image from Inc. Magazine, chart from TradingView
