Bitcoin

Bitcoin has become more susceptible to wild weekend volatility since the launch of spot Bitcoin exchange-traded funds (ETF) in the United States, according to Kaiko Research.
In an Aug. 12 <a href="https://research.kaiko.com/insights/how-is-crypto-liquidity-fragmentation-impacting-markets" target="_blank" rel="noopener nofollow">report</a>, Kaiko’s crypto analysts noted Bitcoin’s liquidity has become more concentrated on weekdays, particularly in BTC/US dollar markets.
It noted that weekend trading volatility has generally declined since 2021 and has previously reported that Bitcoin’s weekend trading <a href="https://cointelegraph.com/news/weekend-bitcoin-trading-falls-from-tradfi-and-etf">volumes have&nbsp;</a><a href="https://cointelegraph.com/news/weekend-bitcoin-trading-falls-from-tradfi-and-etf">dropped</a>&nbsp;as institutional and ETF activity has grown.
But the increased move to weekday Bitcoin <a href="https://cointelegraph.com/learn/swing-trading-vs-scalping">trading</a> “heightens the risk of sharp weekend price swings during market stress,” Kaiko wrote.
Related: <a href="https://cointelegraph.com/news/crypto-etfs-expand-new-asset-types-indexes-grayscale-executive">Crypto ETFs will expand to new asset types, indexes — Grayscale executive</a>
During the last large-scale Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>) sell-off on Aug. 5,&nbsp;<a href="https://cointelegraph.com/news/bitcoin-breaks-below-50000-august-2024">when it dipped below</a> $50,000, Kaiko noted “liquidity fragmentation” in the crypto markets, leading to price discrepancies across exchanges, particularly affecting smaller, less liquid exchanges. 
It noted that during the sell-off, Bitcoin moved 14% between the US market close on Friday, Aug. 2, to its reopening on Monday, Aug. 5, “similar to major sell-offs since 2020.”
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 “Unlike traditional markets that close on weekends, crypto markets operate 24/7. This causes sell-offs that start on a Friday to worsen weekend uncertainty, amplifying price impacts.”
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 <img src="https://s3.cointelegraph.com/uploads/2024-08/96a801d5-7c37-4506-b199-b4fdcbf4f1dc.png" alt="Bitcoin risks ‘sharp weekend price swings’ as ETFs suck up liquidity" title="">
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 The latest sell-off saw Bitcoin’s price move almost as much as during the US banking crisis in early 2023. Source: Kaiko Research
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Meanwhile, Kaiko said a $100,000 Bitcoin sell order during the Aug. 5 sell-off would have produced significant <a href="https://cointelegraph.com/learn/crypto-trading-basics-a-beginners-guide-to-cryptocurrency-order-types">price slippage</a> depending on the exchange and trading pair.
Zaif’s Bitcoin/yen pair saw slippage of up to 5.53%, while KuCoin’s BTC/euro pair reached nearly 5.5%. Meanwhile, US dollar stablecoin pairs on BitMEX and Binance.US saw slippage reach up to 4% on the day.
The 11 <a href="https://cointelegraph.com/news/morgan-stanley-bitcoin-etf-united-states-wealth-advisors-securities-exchange-com">spot Bitcoin ETFs</a> in the US have drawn in $17.3 billion in net inflows since January and currently hold about 4.7% of Bitcoin’s supply, giving them a reasonable hold over the cryptocurrency’s liquidity.
Magazine: <a href="https://cointelegraph.com/magazine/bitcoin-price-prediction-ethereum-altcoins-crypto-trader-roman-hall-of-flame-cointelegraph/">Ethereum price will lag for ‘months’ as Bitcoin surges: X Hall of Flame, Roman</a>

Bitcoin risks ‘sharp weekend price swings’ as ETFs suck up liquidity

Cointelegraph

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