Bitcoin weekend trading decreases as liquidity worsens and institutional participation increases, impacting market infrastructure. Kaiko's research highlights the decline in weekend trading volume and its implications for market dynamics.
Ethereum might be buzzing non-stop, but weekend cryptocurrency trading is rapidly evolving, as per insights from crypto market analysis firm Kaiko.
Since the beginning of 2024, merely 13% of Ethereum transactions have occurred on Saturdays and Sundays—days when conventional markets for equities and bonds are at rest. This marks a decrease from 17% witnessed throughout the previous year and a significant drop from the 24% recorded in 2018.
“The decline indicates deteriorating liquidity conditions during weekends and could be attributed to both increased institutional involvement and deteriorating market infrastructure,” Kaiko highlighted in a research brief published on Tuesday.
Where have all the weekend #crypto traders disappeared to?
The proportion of #ETH traded on weekends has noticeably dwindled over the past six years.
Thus far in 2024, only 13% of all transactions were carried out over the weekend. pic.twitter.com/t35PZbtsMk
— Kaiko (@KaikoData) February 27, 2024
In concrete terms, the cumulative ETH/USDT trading volume on weekends in the previous year amounted to 11 million ETH, a drop from 15 million ETH in 2022. Concurrently, ETH/USD trading volume plummeted to an all-time low last year, with 2 million ETH, less than half of the figure observed in the prior three years.
Given that Traditional Finance (TradFi) entities shutter their operations on weekends, significant crypto holders and market makers have perennially encountered liquidity management challenges during those periods. Kaiko pointed out that these challenges were exacerbated in March 2023, following the closure of several of the most crypto-friendly banks in the United States.
Coinbase, for instance—an exchange domiciled in the U.S.—experienced greater difficulty trading on weekends last year compared to its international counterpart, Binance. “The average bid-ask spread, a metric for trading costs, has widened on Coinbase since Q2 2023, indicating deteriorating weekend liquidity,” Kaiko elaborated.
While the long-term decline in weekend volume is a global trend, it has consistently been a more active trading period in offshore markets. This year, only 11% of Ethereum volume in the U.S. transacted on the weekend, contrasting with 15% overseas.
The recent approval of Bitcoin spot ETFs also influences this dynamic. Funds managed by BlackRock and Fidelity witnessed record-breaking daily volumes on Monday, swiftly emerging as leading Bitcoin spot trading venues in the nation.
However, these red-hot investment instruments are operational solely during stock market hours, with minimal transfers occurring between issuers and exchanges on weekends.
“This indicates that the divide between weekends and weekdays could further widen as ETFs gain momentum and reshape the market structure,” Kaiko concluded.