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The average trading weekend volumes in the crypto market have dropped by 10%, while the weekday volumes have risen by 16%, according to Kaiko.
The decline in weekend trading volumes was attributed to the closure of Silvergate Exchange Network (SEN), forcing market-makers to rely on traditional payment routes.
Recent shifts in the crypto industry have brought about significant routine changes in trading volumes throughout the week. The market performs better on Monday-Friday and less on weekends, contrary to the previous 24/7 routine.
The average trading weekend volumes have dropped by 10%, while the weekday volumes have risen by 16%, according to digital assets data provider, Kaiko.
Conor Ryder, a research analyst at Kaiko, attributed the shift to the closure of Signet and Silvergate Capital Corp.’s Silvergate Exchange Network (SEN), mainly in the American market. Signet is the real-time payment for crypto firms run by the fallen Signature Bank.
Ryder said that the collapse of these significant firms forced market-makers to rely on traditional payment routes mostly closed on weekends shifting the volumes to workdays.
BTC-USD volume has shifted to weekdays since the closure of SEN as markets become less 24/7
— Kaiko (@KaikoData) May 2, 2023
Average daily weekend volume has decreased by 10% 📉
Average daily weekday volume has risen by 16% 📈 pic.twitter.com/Xqe8esaa5S
Uncertain crypto regulations affect weekly trading volumes
Ryder also noted that the changes in the U.S. crypto regulatory environment are indirectly causing the shift. Crypto firms in different parts of the world, with friendlier jurisdictions, prioritize 24/7 settlement more.
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Silvergate had a payment platform for crypto clients to transact round the clock as the heart of its services to the crypto industry. The system’s slogan is, “Goodbye, regular banking hours. Hello, 24/7,” making it a reliable platform.
However, Signature and Silvergate collapsed in the American banking sector saga witnessed in March, leaving the crypto industry in turmoil.
Many crypto market watchers have been focusing on liquidity and trading volumes. The trading volumes decreased during the 2022 crypto blowups, which had retail investors abandoning the market amid severe price falls. The volumes hit their lowest in 2022 as the industry witnessed the worst crypto winter yet.
Binance, the largest crypto exchange platform, introduced zero-fee trading on several pairs in 2022. The move attracted a 20% increase in market share.
However, the platform stopped the zero-fee trading offer on 13 bitcoin trading pairs in March 2023 but retained zero-fee trading on the largest bitcoin trading pair, Bitcoin-TrueUSD.
The halting of zero-fee trading has resulted in a sharp drop in daily Bitcoin trading volume.
We've got a new most liquid pair in crypto ⚠️
— Conor Ryder (@ConorRyder) May 2, 2023
TUSD-USDT
Someone's come in with a huge liquidity injection of $200mn in the last day.
Biggest injection of liquidity I've ever seen – TUSD continues to force itself into stablecoin conversation pic.twitter.com/fcnTBdCmDF
John Hancock Investment Management co-chief investment strategist, Matt Miskin, said liquidity is going down across markets and will reveal the most volatile assets that rely on liquidity. He said that liquidity is a crucial factor in spelling the strength or weaknesses of crypto.
However, the author of the “Crypto Is Macro Now” newsletter, Noelle Acheson, said that although the weekend trading volumes have dropped since the closure of SEN, they are still high.
The high volumes show meaningful crypto demand on weekends despite lacking a significant transfer network.
Read more: Crypto industry pushed to bank with institutional investors