Analysts attribute this to an increase in institutional participation in the cryptocurrency market

Kaiko notes a drop in BTC trading volume over the weekend

27.02.2024 - 08:00

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3 min

What’s new? The share of BTC traded on weekends has dropped significantly over the past six years, from 24% in 2018 to 17% in 2023, according to analytics firm Kaiko in a new report. According to experts, the drop in the figure indicates deteriorating liquidity conditions on weekends and can be attributed to both increased institutional participation and deteriorating market infrastructure.

Kaiko’s report

What else is known? In 2024, only 13% of all BTC transactions between January 1 and February 20 occurred over the weekend. By region, weekend trading volume declined both on offshore exchanges, where it has historically been higher and on platforms available in the United States. The decline in bitcoin trading volume paired with the dollar was the most pronounced, with last year’s weekend figure hitting a record low.

However, Kaiko notes that bitcoin liquidity has recovered following the launch of spot exchange-traded funds (ETFs) based on it in the US, and market makers have increased their positions on local platforms. However, on-chain analysis of ETF-related transactions showed that there were hardly any transfers between fund issuers and exchanges over the weekend.

According to analysts, the difference in trading volume between weekdays and weekends will widen as ETFs, gaining popularity, change the market structure.

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There are currently ten spot BTC ETFs operating in the US market, nine of which were launched in January of this year, with another, GBTC from Grayscale, previously operating as a trust.

According to Bloomberg analyst Eric Balchunas, on February 26, the inflow of funds into nine new funds reached a record of $2,4 billion, slightly surpassing the result of the first day of launch and twice the average daily figure.

Source: Twitter.com

GBTC continues to record outflows, with investors withdrawing $200 million from the fund on February 21 alone.

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