For years, Bitcoin has enjoyed a position of prominence in the world of cryptocurrencies. Its 24/7 accessibility has given it an upper hand, particularly during weekend trading, traditionally known as a hotbed of market volatility. However, recent shifts in trends hint at a transformation.
A recent analysis from Kaiko presents a sobering image. Weekend trading volumes, once a bustling moment in the cryptocurrency cosmos, have plummeted to record lows, potentially indicating an impending era controlled by institutional investors active predominantly during the week.
Going by Kaiko’s data, weekend trading has seen a significant decline, from a zenith of 28% in 2019 to a meager 16% in 2024. This marked downturn largely coincides with the much-awaited introduction of spot Bitcoin ETFs (Exchange-Traded Funds) in the United States. Comparable to the workings of traditional stocks, these funds are only available for trading during standard market hours.
The hand of institutional investors, drawn to these regulated offerings, leaves an undeniable imprint. The report points towards an inclination in Bitcoin transactions during the ‘benchmark fixing window’ referring to the closing hour of US stock trading. There is an implicit indication that institutional players are molding new trading norms, inclining towards weekdays rather than the formerly busy weekends.
However, the decline in weekend activity cannot solely be credited to ETFs. The shuttering of crypto-amicable banks such as Signature and Silicon Valley Bank in March 2023 also plays a part. The 24/7 services these institutions offered facilitated market players to incessantly enact buy and sell orders, leaving a void in weekend liquidity with their untimely departure, which further diminished trading action.
Yet, in dark clouds lie silver linings. The report identifies glimpses of hope for investors in search of stability. The dampened weekend volatility could potentially transform Bitcoin into a more predictable asset, drawing institutional interest. Moreover, historical patterns hint at July as a beneficial month for Bitcoin. Price hikes have been charted in seven out of the last eleven Julys.
While the weekends might be hushed, the upcoming weeks seem poised to bring about some upheaval. The probable sanction of Ethereum ETFs could augment institutional involvement, consequently impacting Bitcoin’s dominance.
The dwindling weekend trading activity suggests a possible shift in Bitcoin’s market dynamics. The ex-volatile weekends might soon be remembered as vestiges of a past time. Nevertheless, the coming months appear to be teeming with excitement.
Institutional investors are now much more in focus, forging fresh trading blueprints and potentially heralding an era of increased stability. However, this month may yet introduce substantial volatility, keeping investors poised on the precipice of anticipation.
