Cryptocurrency research firm Kaiko recently released a report indicating that this year, the proportion of Bitcoin weekend trading volume as a percentage of total trading volume has dropped to a historic low of 16%. Concurrently, Bitcoin’s volatility has also significantly decreased, which may be attributed to the launch of Bitcoin spot ETFs.
Kaiko data shows that the proportion of Bitcoin weekend trading volume has reached a historic low of 16% this year. This trend has become more pronounced following the introduction of Bitcoin spot ETFs, suggesting that these ETFs are aligning Bitcoin trading hours more closely with traditional stock exchange schedules (weekdays) and reducing weekend price volatility.
We know that the cryptocurrency market operates 24/7, including Saturdays and Sundays. Previously, Bitcoin often experienced significant fluctuations even during weekends. However, this phenomenon seems to be cooling off, with the weekend trading proportion of Bitcoin steadily decreasing from its peak of 28% in 2019 (if averaged evenly across all seven days, the weekend proportion should be 28.5%).
Decline in Weekend Trading Volume Due to Spot ETFs
One of the likely reasons behind this increasingly evident trend is the presence of Bitcoin spot ETFs, which adhere to traditional stock exchange schedules and do not trade over weekends. Dessislava Aubert, Senior Analyst at Kaiko, believes that the decline in weekend trading volume has been a multi-year trend exacerbated by the advent of spot ETFs.
Kaiko highlights that the proportion of Bitcoin trading occurring between 3 PM and 4 PM Eastern Time on weekdays has increased from 4.5% in Q4 2023 to 6.7% in Q1 2024. This period is known as the benchmark pricing window, during which ETF owners determine Bitcoin’s price and use it to calculate the ETF’s net asset value.
Additionally, Kaiko suggests that the closure of cryptocurrency-friendly banks like Silicon Valley Bank and Signature Bank has also contributed to the decline in Bitcoin weekend trading volume. Market makers can no longer utilize these banks’ 24/7 payment networks for instant cryptocurrency trading.
Decrease in Bitcoin Volatility
Furthermore, another report by Kaiko reveals that institutional entry into the cryptocurrency space through Bitcoin spot ETFs has significantly reduced Bitcoin’s price volatility. In November 2021, when Bitcoin last set a historic high, volatility soared to nearly 106%, whereas during this year’s March peak, volatility was only 40%.
According to Kaiko, the trend of decreasing Bitcoin price volatility, along with volatility consistently staying below 50% since early 2023, suggests that Bitcoin is becoming a more mature asset. While it’s premature to label this as the new normal, changes in the Bitcoin market structure over the past year may help explain why Bitcoin’s movements have become relatively subdued.
Related Reports
Rich Dad Warns: Bitcoin ETFs Are Fake, Buying Real BTC Is the Way
Bitcoin Rune Trading Volume Drops by 90%! Miners Globally Get Only 1 BTC Daily
Opinion》Is Bitcoin’s Decline Market Panic or a Conspiracy of Large Mining Companies?