According to Bloomberg, data from cryptocurrency research firm Kaiko shows that Bitcoin’s weekend trading proportion has dropped to a historic low of 16% this year. This decline follows the launch of Bitcoin exchange-traded funds (ETFs), aligning Bitcoin trading hours more closely with traditional stock exchanges and reducing price volatility.
Bitcoin trading was previously noted for its “wild weekends,” characterized by significant price fluctuations, but this phenomenon appears to be cooling off. Weekend trading volume for Bitcoin has steadily decreased from its peak of 28% in 2019, with the introduction of Bitcoin ETFs likely playing a pivotal role.
Source:
Kaiko
According to Dessislava Aubert, a senior analyst at Kaiko, the decline in weekend trading volume is a “multi-year trend, accelerated by the ETF.” The introduction of the U.S. Bitcoin spot ETF in January 2024 sparked investor enthusiasm, driving Bitcoin prices to a record high of approximately $73,800 in March.
Kaiko reports that Bitcoin’s trading proportion between 3 PM and 4 PM Eastern Time on weekdays increased from 4.5% in the fourth quarter of 2023 to 6.7%. This period is known as the benchmark pricing window, during which ETF owners determine Bitcoin’s price to calculate the net asset value of the ETF.
Kaiko attributes the decrease in weekend trading volume to the closure of cryptocurrency-friendly banks like Silicon Valley Bank and Signature Bank, which market makers relied on for real-time cryptocurrency trading via their 24/7 payment networks. Kaiko’s report indicates that the passage of ETFs has also contributed to reduced Bitcoin volatility.
According to another report by Kaiko, institutional adoption of Bitcoin through ETFs has significantly lowered Bitcoin price volatility. When Bitcoin hit its previous all-time high in November 2021, volatility spiked to nearly 106%. However, when Bitcoin reached its historical peak in March of this year, volatility only reached 40%.
Source:
Kaiko
Kaiko notes that the trend of decreasing volatility, along with the fact that volatility has remained below 50% since early 2023, indicates that Bitcoin is becoming a more mature asset. Their report underscores
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