Changing Crypto Trading Patterns Reveal the Market’s Power Shift to the West

Nasdaq

A recent blockchain analysis has pinpointed a dramatic shift in trading patterns this year from Asia to North America and Europe.

By analyzing trading activity on centralized exchanges from different days and time zones, blockchain data firm Kaiko found that on Coinbase, Gemini and Kraken, the ratio between the volume of weekend and weekly BTC/USD trading doubled from March 2020. This finding showed that the average weekend bitcoin trading volume is growing relative to the average weekday volume on the three exchanges that are more popular among users in the West.

How To Get Free Crypto  

Meanwhile, as the chart below shows, the ratio of the BTC/USDT pair on crypto-to-cyrpto exchanges Binance, Huobi and OKEx has remained at around 1 in weekday and weekend volume over the past year. The three exchanges represent the power of retail investors in East Asia, especially in China.

Related: Market Wrap: Bitcoin Slips as Infrastructure Bill With Crypto Tax Provision Heads to House

On the derivatives market, Kaiko saw that, on an hourly basis, trading volume for bitcoin perpetual futures contracts on Binance and FTX, the two biggest derivatives exchanges, surged around 16:00 UTC. The peak trading time on the two exchanges overlaps between European and U.S. trading hours, suggesting that European Union and U.S. jurisdictions have become “extremely” significant for global crypto exchanges.

“With China cracking down on crypto trading and businesses, a lot of the volume has shifted to North America in the last 12 months,” said Kevin Kang, founding principal of U.S.-based quant hedge fund BKCoin Capital.

Kaiko’s report also show that while the crypto community has focused on the growing presence of institutional investors, it may have underestimated an increase in retail investors.

Coinbase Banner  

“This trend conflicts with bitcoin’s institutional narrative as it supposes that retail participation is increasing,” Dessislava Aubert, research analyst at Kaiko, told CoinDesk.

TradFi playing a role

Related: FTX Market Share in Bitcoin Futures Nearly Doubled Since June

Kaiko’s findings also highlight how investors from traditional finance may have played a role in changing trading behaviors, according to market observers.

Rising weekend trading volume could be partly attributed to automated trading tools that can move some trading activities to weekends, according to Kaiko. Traders who usually conduct large-volume transactions may choose to split their orders into smaller sizes over a longer period of time to “minimize the execution costs and price impact,” Kaiko said.

“As more traditional market makers and quant shops [are] coming into the [crypto] space, we see higher liquidity on weekends than we saw in the past,” Kang said.

FreeBitcoin Banner  

Joel Kruger, cryptocurrency strategist at institutional crypto exchange LMAX Digital, told CoinDesk that the trading volume in the past weekend at LMAX Digital was up by 85% from the weekend before, as institutional investors tracked the hotly debated $28 billion tax reporting provision of the $1 trillion U.S. infrastructure bill.

“We’re definitely seeing institutional players taking advantage of the 24-7 access to markets,” Kruger said. “This means being able to react to developments as they’re happening as opposed to being stuck in a position and needing to wait for the market to open up on Monday.”

Related Stories

  • Human Rights Foundation, Compass Mining Give $80K to Sponsor Bitcoin Developer
  • Bitcoin Upside Stalls; Lower Support at $38K-$40K

Go to Source
Author: CoinDesk


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.