Bitcoin Market Transformation: Spot ETFs Drive New Trading Dynamics

The Bitcoin market is undergoing a significant transformation in its trading patterns due to the introduction of spot Bitcoin exchange-traded funds (ETFs), bringing it closer to traditional financial markets. Weekend trading has significantly decreased, with the proportion of Bitcoin traded on Saturdays and Sundays falling to just over 15% this year, down from a peak of 28% in 2019. This trend is driven by the growing popularity of ETFs and the reduced ability of market makers to use 24/7 payment networks for real-time crypto transactions. Additionally, weekday trading patterns have shifted, with more Bitcoin being traded between 3 p.m. and 4 p.m., the benchmark fixing window for ETFs. This change is further evidenced by the significant decrease in Bitcoin price volatility, which has fallen to under 50% since the start of 2023, indicating Bitcoin's maturity as an asset. While Bitcoin's price has faced some recent challenges, ETFs have seen positive momentum for four consecutive days, with significant contributions from BlackRock's IBIT ETF. This influx has largely offset outflows from other major Bitcoin ETFs, demonstrating the growing institutional interest in the cryptocurrency market.