TradFi institutions and spot ETFs result in decrease in weekend Bitcoin trading

Bitcoin (BTC) trading volume on weekends has been steadily declining due to increased institutional participation and market infrastructure challenges, according to crypto research firm Kaiko. Between 2018 and 2021, around 25% of Bitcoin trading volume occurred on weekends, but that figure has dropped to 13% so far in 2024. Kaiko attributes this decline to the mismatch between the operating hours of traditional financial institutions and the needs of crypto traders and market makers. The research firm also noted that several crypto-friendly banks in the US have closed down, exacerbating the liquidity challenge. While weekend trading fell on both US and offshore exchanges, it remained slightly higher on offshore exchanges like Binance, HTX, OKX, Bybit, and Upbit. Kaiko observed poorer liquidity conditions on US-based Coinbase over weekends compared to Binance. However, Bitcoin liquidity has rebounded since the launch of spot Bitcoin exchange-traded funds (ETFs) in the US, although few transfers have been made between the ETF issuers and exchanges over weekends. Kaiko predicts that this gap may widen as ETF issuers continue to increase their Bitcoin holdings.