The crypto industry operates in a virtual environment, which means it doesn’t technically “open” and “close”. Don’t expect to see grand openings on Monday morning and burnt-out Friday afternoons.
Blockchain technology isn’t subject to any regulatory establishment, so there is no technical obstacle to facilitating trades outside business hours, as is the case with traditional stock markets. Although the crypto market never sleeps, this doesn’t mean that timing can’t affect the outcome of your trade.
Seasoned crypto traders know well that despite being open 24/7, the crypto market has its peak hours and seasons. In general, trades executed when the global market is highly active are more likely to result in favourable exchange rates and higher liquidity. For example, the Bitcoin price falls over the weekend — below, you’ll read why.
Apart from the weekend price movements, we’ll also look at other aspects affected by the working hours in the crypto ecosystem.
Table of Contents
How Does Crypto Trading Work?
Those who have first-hand experience with online stock exchanges know that, at its core, cryptocurrency trading doesn’t differ from trading any other traditional assets, especially now that crypto has reached mainstream proliferation.
In most cases, users get full access to the crypto market through cryptocurrency exchanges — web platforms that enable users to buy, sell, or swap digital currency. With a market value of 1.5 trillion U.S dollars, according to CoinMarketCap, blockchain-based products opened so much room for the diversification of crypto exchanges that we can’t discuss them in general terms. However, the scope of their services ultimately falls down to simplifying the trading process by providing real-time price info for different cryptocurrencies and an “arena” where buyers and sellers can meet.
Centralized vs Decentralized Crypto Exchanges
Concerning their operational domain, cryptocurrency exchanges can be categorized into two groups: centralized crypto exchanges (CEXs) and decentralized crypto exchanges (DEXs)
Centralized Crypto Exchanges
As attested by their market cap figures, centralized exchanges are the backbone of the entire crypto industry. When you visit the web platform of any centralized exchange, the first thing you notice are its striking similarities to all other interactive e-commerce platforms where you buy products and services on a regular basis.
Centralized exchanges tend to provide user-friendly design, active customer support, and sleek navigation through their platforms. A great number of CEXs operate as entry-level brokerage services that support instant purchases of crypto against fiat money or other digital assets. They’re designed to make newcomers confident in completing a full buy-and-sell transaction.
Certainly, there are centralized exchanges that maintain a professional edge by providing more complex trading features such as crypto derivatives, CFDs, and margin trading. Professional crypto trading platforms deliver a myriad of charting tools, candlesticks, and other in-depth market data for a full trading experience. Until recently, pro exchanges of this calibre didn’t support fiat currencies on their platforms, but now there is a general tendency to enable fiat payments through external payment processors like MoonPay and Simplex to attract wider audiences.
You should be aware that tightening government regulations (especially regarding fiat currencies) requires obligatory ID verification before joining an entry-level exchange. All crypto-related financial services are treated as regular money transmitters, which are then subject to strict AML/CFT policies. As regulated trading companies, centralized exchanges can offer an additional layer of user protection (some even an insurance policy) in case of a hacker attack or any other form of a virtual scam.
Decentralized Crypto Exchanges
Decentralized crypto exchanges (DEXs) use a P2P (peer-to-peer) operational pattern that allows users to interact with each other without a third party to facilitate the trade. This makes DEXs closer to the blockchain idea of a fully decentralized financial system.
Thus, decentralized exchanges rely on the use of self-executing smart contracts and dApps (decentralised applications) built on predetermined metrics to process the transaction. At this point, DEXs are mostly associated with instant swaps of tokens built on the Ethereum blockchain and rarely accept fiat as a payment option.
Because decentralized exchanges aren’t corporate-run entities, their users don’t have to go through KYC verification, so the exchange will never keep a record of your personal or bank information. Instead, they let you transfer tokens directly from your crypto wallet.
This, together with the lack of human interference, makes DEXs a more secure option for trading cryptocurrency.
However, traditional DEXs don’t feature a smooth user interface, which can lead to delayed processing times and affect the overall efficiency of the transaction. That’s why decentralized exchanges are never the first choice of novices. In addition, DEXs have been suffering critical liquidity issues, and this has been their main barrier to attracting high-scale corporate clients.
Blockchain developers have placed a lot of faith in the new generation of AMM protocols as a workable solution for the unsustainable liquidity of DEXs. Next-gen decentralized exchanges use AMM protocols as an instrument that provides liquidity as a replacement to the traditional order-book model in a DeFi environment.
What’s the Best Bitcoin Exchange on the Cryptocurrency Market?
It’s almost impossible to single out the best Bitcoin exchange as it’s a competition based on individual trading preferences, especially after the price of Bitcoin has crossed an exchange rate of $60,000.
However, if we consider some universal criteria that make a reliable marketplace combined with market cap figures, we can say that Binance is a global leader in this field. Apart from Bitcoin (BTC), the exchange offers an impressive selection of altcoins such as Ethereum (ETH), Litecoin (LTC), Cardano (ADA), Dogecoin (DOGE), Ripple (XRP), Bitcoin Cash (BCH), and many other popular and new cryptocurrencies, including ERC20 tokens, NFTs, and stablecoins like Tether (USDT).
Binance has managed to respond to the needs of all types of Bitcoin traders regardless of their previous experience in crypto. In terms of trading services, the exchange offers instant purchases, a spot market, a separate P2P pl, and advanced settings for trading crypto derivatives.
Before the ground-shaking appearance of Binance in 2017, the US-based Coinbase was the busiest marketplace on a global scale. Despite being “dethroned”, Coinbase is still considered the most beginner-friendly solution for new crypto users.
Do Crypto Trading Networks Have Time Limit?
Now that you learned that cryptocurrency exchanges can be very similar in their operational models to other stock trading platforms, let’s move on to the two key differences between a crypto exchange and a stock exchange. The first one is the increased market volatility, while the second is the fact there are no set trading hours.
Crypto markets can execute transactions 24 hours a day, seven days a week but with variable liquidity, going up and down clockwise depending on the parts of the day. For day traders who rely on market movements, this makes a drastic variation from the traditional investment market. Namely, while stock traders compare the current asset price with its position at the end of the business day, crypto traders don’t use a fixed time but consider the asset’s price 24 hours ago as the closing position instead.
The lack of time limitation also alters the way traders scrutinize daily figures. The same as the previous example, if there is an amount that indicates the open and close price, it doesn’t mean that the market really began or closed at that point. Instead, start-and-close figures show traders that the crypto asset has one exchange rate at 00:00 hours and another at 23:59 because, technically, these are the actual crypto business hours.
As we implied at the beginning, even though the crypto market doesn’t close on weekends, price charts do show decreased activity in this period. However, these fluctuations happen spontaneously through trading, not because of official working-time regulations.
Trading Hours of Traditional Stock Markets
Stock exchanges have strictly defined trading hours to achieve maximum liquidity between opening and closing times. Officially, a stock exchange opens at 9:30 AM ET and closes at 4 PM every day except weekends and holidays. The stock market is also prone to external economic movements. In general, it’s busiest at the beginning of the new working day when investors respond to news and global financial events from the previous day.
However, working times vary from country to country, which is one of the greatest challenges for investment brokers. First, bank holidays are different in each territory — the New York Stock Exchange is always closed on 4 July when the USA celebrates Independence Day. Some stock exchanges in Asia count lunch breaks as off-work hours, which is untypical for the rest of the investment ecosystem. Finally, weekends in the Middle East fall on Friday and Saturday, when you can find no stock services available.
On the other hand, Forex markets have a more flexible schedule as they run 24 hours a day for most parts of the week — from 12:00 GMT on Sunday to 11:00 GMT on Friday. Similar to cryptocurrencies, the movement and liquidity levels aren’t static. Forex companies run specific working hours and they consider the most productive trading time when two or more forex markets are open at the same time i.e. when cross-country time zones overlap. For example, London and New York have 3 working hours in common, and in this period, it’s easiest to execute a trade because of the boosted liquidity.
Advantages and Disadvantages of 24/7 Crypto Trading
At first sight, the full-time availability of the crypto market seems an ideal setting for a day trader. However, the market being open 24/7 comes with a set of both benefits and burdens. This is what we could conclude based on the personal experiences of seasoned crypto-traders.
- Unlimited access to markets anytime
- Added convenience for traders across different time zones
- Possibility for higher returns because of the increased availability
- High risk for traders of missing significant market changes due to unregulated working hours.
- Sharp volatility of assets at unexpected time points
- Crypto exchanges that individually set limited access to the market on certain occasions.
Does 24/7 Crypto Trading Affect Exchanges?
There is a conflict between the perpetual motion of the crypto market and the business hours of all centralized institutions involved in the trading process, such as centralized crypto exchanges, banks, and other fintech companies.
Traditional financial markets have regular daily and weekly breaks that allow users to take a deep breath and question their trading strategies or relocate their funds for the next move. So, it’s not uncommon for a crypto trader to activate a withdrawal at a point when central banks don’t work, which results in a slow and inefficient flow of the assets.
It’s the same situation with deposits — bank transfers are the most commonly used deposit method for refilling exchange accounts. But, it goes without saying that if you initiate a transaction on a Saturday night, the bank won’t move those funds immediately. Any lag of this type can profoundly impact user performance since prices and favourable offers change rapidly.
In this context, we’ll also point out the customer support factor. Apart from automated chatbots, customers need personal interaction with human experts to respond to their queries. No tech team out there can provide 24/7 personal assistance.
How Does the Crypto Market Work Over the Weekend?
Crypto markets are highly volatile, and major price dips are very noticeable during the weekday-weekend transition. The reason for this low weekend activity depends on a couple of factors:
- Reduced trading volume
Both full-time and casual traders usually take weekends off. As a result, exchanges’ volume plummets on the weekend, and the trades executed over this period may have an outsized effect on the market.
- Institutional mismatches
Given that banks are closed over the weekend, traders are unable to send more money to their exchange accounts. This mostly affects margin-trading markets, where users borrow funds to make a trade that is greater in size than what they can afford to invest. In order to protect themselves, crypto exchanges that offer this type of service employ a mechanism called a margin call. If the user’s position triggers a margin call, they will either have to close their position by repaying the debt or increase their capital, neither of which is possible without a bank account transfer.
And, as we implied several times throughout this article, things move extremely fast in this industry so the time gap between Saturday and Monday is a decade measured in crypto-years.
Conclusion —What’s the Best Time to Trade Crypto?
Even though there isn’t a predefined pattern that will give us an upfront answer to this question, experts have gathered some statistics to show the most favourable times for executing trades. In a word, professional day traders are most active during weekdays.
More specifically, Monday has turned out to be the day with the highest returns, followed by Friday and, surprisingly, Saturday. As for hours, stats show the Bitcoin network is busiest at around 12 pm ET.
Certainly, these trends can’t guarantee a positive outcome. So, crypto traders shouldn’t build their risk-management strategies solely on-time stats, not only because they can be inaccurate, but also because the crypto landscape easily changes over time.
Finally, use the time factor cautiously and just use the off-limit hours to your advantage.
After all, the cryptocurrency market is a volatile rollercoaster, but at least, it lets you be flexible around your own schedule.