According to Bloomberg’s report, data from cryptocurrency research firm Kaiko shows that Bitcoin’s weekend trading volume has dropped to a historic low of 16% this year. This decline follows the launch of Bitcoin exchange-traded funds (ETFs), which appears to align Bitcoin’s trading hours more closely with traditional stock exchanges, thereby reducing price volatility.
Bitcoin trading was previously known for its “wild weekends,” characterized by significant price swings, but this phenomenon seems to be cooling off. Weekend trading volume for Bitcoin has steadily decreased from its peak of 28% in 2019, likely influenced by the introduction of Bitcoin ETFs.
Kaiko’s senior analyst, Dessislava Aubert, noted that the decline in weekend trading volume is a “long-standing trend, exacerbated by ETFs.” The approval and subsequent popularity of U.S. Bitcoin spot ETFs since January 2024 have contributed to this trend, coinciding with Bitcoin’s price surge to a historic high of around $73,800 in March.
Kaiko reports that Bitcoin’s trading proportion between 3 PM and 4 PM Eastern Time on weekdays has increased from 4.5% in Q4 2023 to 6.7%. This period is referred to as the benchmark pricing window, where ETF owners determine Bitcoin’s price 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 prevented market makers from using their round-the-clock payment networks for instantaneous cryptocurrency trades.
Furthermore, according to another report by Kaiko, institutional adoption of Bitcoin through ETFs has significantly reduced Bitcoin price volatility. When Bitcoin reached its previous all-time high in November 2021, volatility spiked to nearly 106%, whereas during its new high in March this year, volatility only reached 40%.
Kaiko’s analysis suggests that the decreasing trend in volatility, along with volatility consistently staying below 50% since early 2023, indicates Bitcoin is becoming a more mature asset.
Sources:
Kaiko
