As spot ETFs grow, bitcoin liquidity transforms from 24/7 to traditional Monday-Friday trading

With the launch of spot bitcoin exchange-traded funds in the United States, the weekend share of bitcoin trading volume has fallen to the lowest level on record.

The 24/7 nature of crypto markets has often created a mismatch between traditional finance operating hours and large traders and market markers in the space — compounded by the collapse of crypto-friendly banks Silvergate and Signature in March 2023.

However, the weekend’s share of bitcoin trading volume has now fallen to just 13% so far this year — nearly halving from a 24% share in 2018 — according to a report from Kaiko analysts.

Weekend share of bitcoin trade volume. Image: Kaiko.

“The decline suggests worsening liquidity conditions during weekends and could be explained by both increased institutional participation and worsening market infrastructure,” the analysts said.

More pronounced in the US

The decline in trading volume over the weekend is more pronounced across U.S.-based crypto exchanges — falling to 11% — though offshore venues also exhibit a similar trend. “Interestingly, weekend trade volume has historically been higher on offshore markets, suggesting increased retail participation,” the analysts noted.

Weekend share of bitcoin trade volume by region. Image: Kaiko.

Kaiko suggests the poorer weekend liquidity conditions in the U.S. are observable by monitoring the widening weekend average bid-ask spread — the cost of trading — on Coinbase compared to Binance.

Average bitcoin bid-ask spread on weekends. Image: Kaiko.

Bitcoin liquidity has rebounded following the launch of the spot bitcoin ETFs as market makers increased their positions on U.S.-based platforms, Kaiko said. However, with the funds trading Monday to Friday, “the gap between weekends and weekdays could deepen further as ETFs gain traction and change the market structure,” the analysts added.