Due to TradFi institutions and spot ETFs, the weekend bitcoin trading decreased
Bitcoin (BTC) trading volume continued to decline on Saturdays and Sundays this year as institutional participation in Bitcoin increased, leading to weak weekend market flow, according to crypto research firm Caico.
In the year Between 2018 and 2021, a quarter of Bitcoin trading took place on the weekend, which has seen a steady decline since then and has fallen to 13% so far in 2024, Caico said on February 26.
“The decline indicates worse liquidity conditions over the weekend and can be explained by both institutional participation and worsening market infrastructure,” he wrote.
Kaiko, a 24/7 crypto exchange, “has long been a challenge for the exchange as it creates a mismatch between the working hours of traditional financial institutions and the needs of large crypto traders and market makers.”
This is evidenced by the closure of several crypto-friendly banks in the United States, Kaiko explained.
Caico noted that the weekend's trading slumps hit US and offshore exchanges.
However, weekend trading is slightly higher on offshore exchanges such as Binance, HTX, OKX, Bybit and Upbit. Overseas exchanges had 15% of weekend trades, compared to 11% at US exchanges such as Coinbase, Kraken and Bitstamp.
Caico said it noticed “weaker liquidity conditions” on US-based Coinbase over the weekend, compared to a fall on Binance over the same period, where trades on Coinbase have risen since the second quarter of last year.
Related: Australian Bitcoin Sentiment Jumps After US Spot Bitcoin ETF Approvals
Bitcoin liquidity has rebounded strongly since the launch of Bitcoin exchange-traded funds (ETFs) in the United States, the research firm noted.
However, few transfers were made between spot Bitcoin ETF issuers and weekend exchanges, Kaiko said.
It is concluded that this gap may widen as ETF issuers continue to increase their holdings of Bitcoin.
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