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Crypto Market Research Firm Observes Declining Weekend Trading Activity for Bitcoin

Crypto Market Research Firm Observes Declining Weekend Trading Activity for Bitcoin

Tim Hakki

Last updated:

| 2 min read

Bitcoin’s weekend liquidity is declining

Nobody is trading Bitcoin on the weekend anymore, concludes a new blog post by analysts at blockchain market data provider Kaiko.

So far this year, only 13% of all Bitcoin transactions have been executed on the weekend. This is down from 17% last year and 24% back in 2018.

Over that same period covering 2018 to present day, weekend trading volumes on offshore exchanges fell from 27% to 15%.

For onshore markets, the same figure fell from 21% to 11%.

The historically higher figures for offshore participation suggest crypto’s weekend players have typically been retail (individual customers) rather than institutions.

Kaiko’s note highlights that weekend downturns have hit crypto-fiat trading hardest. BTC-USD weekend trading volume hit an all-time low last year of 2 million BTC. For comparison, that same figure for Bitcoin-Tether (USDT) trades was 11 million BTC.

When looking at the bid-ask spread of Bitcoin, weekend liquidity is poorer on Coinbase than on Binance. The bid-ask spread indicates the variation in the typical bid (buy) or ask (sell) prices of Bitcoin on the exchanges. The wider the variance, the more illiquid the venue.

Finally, Kaiko noticed that none of the transactions related to the ten recently approved spot Bitcoin exchange-traded funds (ETFs) happened on weekends.

Kaiko’s data broadly reflects Bitcoin’s current state of play, since the US SEC’s recent approval of spot Bitcoin ETF trading has meant billions in institutional money has flowed into Bitcoin.

In other words, now that traditional finance has joined the fray, Bitcoin is keeping more regular hours.

Bitcoin ETFs Pump Trading

By far 2024’s biggest price-driving narrative to date has been the ETFs. Today, Bitcoin is trading at over $59k, a level not previously seen since November 2021. A carefree time before UST’s historic collapse crashed the entire market and spread contagion through it, bankrupting multiple lenders and exchanges. .

The launches were historic in the sense that the SEC finally made a concession to the industry. Several asset managers, including ArkInvest and GrayScale, had long applied for spot Bitcoin ETF products but were getting knocked back by the SEC.

Under Chairman Gary Gensler, the federal agency has conducted a “regulation-by-enforcement” approach towards the industry, suing it for alleged offences against securities laws rather than offering clear guidance on how to comply with said laws.

The industry has long argued that it is unclear how current US securities laws apply to crypto tokens.

The SEC eventually approved ETFs to trade on January 10 this year after a federal court ruled that the agency’s rejection last year of Grayscale’s application to convert its Bitcoin Trust into an ETF was “arbitrary and capricious.”

Earlier this month, the ETFs took in a combined $1.1 billion in inflows. On Tuesday, market leader Blackrock’s ETF recorded an eye-popping $1.3 billion in inflows on a day when the products collectively netted $2.4 billion.

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