According to Bloomberg, data from the cryptocurrency research firm Kaiko shows that Bitcoin’s weekend trading volume has dropped to a historic low of 16% this year. This decline comes after the introduction of Bitcoin exchange-traded funds (ETFs), which appears to align Bitcoin trading hours more closely with traditional stock exchanges and reduce price volatility.
Bitcoin trading was previously known for its “wild weekends,” with significant price fluctuations occurring. However, this phenomenon seems to be cooling off. Weekend trading volume for Bitcoin has steadily decreased from its peak of 28% in 2019, a trend possibly exacerbated by the launch of Bitcoin ETFs.
Source:
Kaiko
According to Dessislava Aubert, senior analyst at Kaiko, the decline in weekend trading volume is a “long-standing trend, but ETFs have intensified this trend.” The approval and subsequent popularity of Bitcoin spot ETFs in the United States since January 2024 contributed to Bitcoin reaching a historical high of around $73,800 in March.
Kaiko notes that Bitcoin’s trading volume between 3:00 PM and 4:00 PM ET on weekdays increased from 4.5% in Q4 2023 to 6.7%. This period is known as the benchmark pricing window, where ETF owners determine Bitcoin’s price, which is then used to calculate the ETF’s net asset value.
Kaiko also attributes the decline 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 transactions throughout the day.
Source:
Kaiko
Additionally, ETF adoption by institutions has significantly reduced Bitcoin’s volatility, as indicated by Kaiko’s report. When Bitcoin reached its previous all-time high in November 2021, volatility soared to nearly 106%. In contrast, when Bitcoin set a new high in March this year, volatility only reached 40%. This trend towards decreased volatility, coupled with volatility consistently staying below 50% since early 2023, underscores Bitcoin’s evolution into a more mature asset.
Kaiko’s report emphasizes: