A recent trend has emerged in the crypto industry, with weekday trading volumes rising by 16%, while weekend trading volumes have dropped by 10%, as reported by digital assets data provider, Kaiko. This shift marks a significant change from the previous 24/7 trading routine, which had persisted for years.
The decline in weekend trading volumes can be attributed to the closure of Silvergate Exchange Network (SEN) and Signet, two major payment networks that catered to the crypto market. Conor Ryder, a research analyst at Kaiko, explained that the collapse of these networks, particularly in the American market, forced market-makers to rely on traditional payment routes, which are mostly closed on weekends. This has resulted in a shift of trading volumes towards weekdays.
Additionally, the changes in the U.S. crypto regulatory environment have also played a role in this shift. As crypto firms look for friendlier jurisdictions that prioritize 24/7 settlement, markets outside the U.S. may maintain or even increase their weekend trading volumes.
The closure of SEN and Signet has left a noticeable void in the crypto industry’s payment infrastructure. These platforms offered clients round-the-clock payment services, catering to the 24/7 nature of the crypto market. Their absence has now made it more challenging for traders to transact on weekends, leading to decreased trading volumes.
On the other hand, reduced weekend trading volumes could be seen as an opportunity for individual traders. The author of the “Crypto Is Macro Now” newsletter, Noelle Acheson, points out that despite the recent decline in weekend volumes, they remain quite high. This suggests that there is still a significant demand for crypto during weekends, though the market now lacks a robust transfer network to support such transactions.
Looking back at the 2022 crypto crash, liquidity and trading volumes were notable concerns for market participants. Retail investors left the market en masse as prices fell and trading volumes reached their lowest point. Binance, the largest crypto exchange, even introduced zero-fee trading on several pairs in response to the crisis, attracting a 20% increase in market share.
However, the crypto market seems to be recovering from these challenges, as evidenced by Binance’s decision to halt zero-fee trading on 13 bitcoin pairs but retaining it on the largest pair, Bitcoin-TrueUSD. The future strength or weakness of the crypto market will likely depend on both liquidity and trading volume.
In conclusion, the shift in trading volumes from weekends to weekdays can be attributed to the closure of significant payment networks and changing regulations. However, weekend crypto demand remains high despite these setbacks, proving the resilience of the market. Investors should stay informed and adapt to these changes to succeed in this dynamic environment.