According to Kaiko, a cryptocurrency research company, the share of Bitcoin traded on weekends has fallen to a record low of 16% this year. This decline coincides with the emergence of Bitcoin exchange-traded funds (ETFs), which have changed the trading pattern of the cryptocurrency, bringing it closer to traditional stock exchange charts, thereby reducing price volatility, Bloomberg reports.
Historically, one of the distinguishing features of Bitcoin has been its 24/7 availability for trading, unlike traditional stocks. This constant trading has led to the phenomenon of "wild weekends" characterized by significant price fluctuations. However, this trend is now on the decline: weekend trading volume has declined from a peak of 28% in 2019. The emergence of Bitcoin ETFs is the main factor behind this change.
The decline of weekend trading is a “trend that has been going on for years, but has been exacerbated by ETFs,” according to Kaiko Senior Analyst Dessislava Aubert.
Bitcoin-ETFs, which were approved by the US Securities and Exchange Commission in early 2024, have become very popular with investors, pushing the price of Bitcoin to a record high in March. Although some of these gains have since been reversed, Bitcoin continues to rise by about 45% this year, trading at $61,000.
Unlike most cryptocurrencies, which can be traded continuously on platforms such as Binance, Bitcoin-ETFs adhere to the trading hours of traditional stock exchanges, which means no trading on weekends.
Kaiko's data shows that the share of bitcoins traded on weekdays between 3:00 and 4:00 p.m. rose to 6.7% from 4.5% in the fourth quarter of 2023. During this time period, known as the benchmark fixing window, ETF managers determine the price of Bitcoin to calculate the net asset value of the ETF.
In addition, the collapse of cryptocurrency banks such as Silicon Valley Bank and Signature Bank in March 2023 caused a decline in weekend trading volume. These banks used to provide 24/7 payment networks for real-time cryptocurrency transactions, which are no longer available.
“The weekend/weekday gap is likely to persist as market makers, who derive their revenues from large amounts of trades earning the bid-ask spread, are less incentivized to provide liquidity in a low volume environment,” Kaiko’s report states.
The institutionalization of cryptocurrencies through exchange-traded funds has also significantly reduced price volatility. When Bitcoin last hit record highs in November 2021, volatility rose to almost 106%. In contrast, after hitting an all-time high of $73,798 in March on ETF optimism, volatility was only 40%.
According to Kaiko, the downward trend in volatility, which has remained below 50% since the beginning of 2023, indicates the maturation of Bitcoin as a financial asset.