Bitcoin's recent 40% decline since October may seem like a typical market dip, but there's more to it. The issue lies in the shift in price discovery, which is now heavily influenced by US equity market hours. As US spot Bitcoin ETFs have gained popularity, institutional investors, options hedgers, and balance-sheet liquidity are all converging during a five-day, six-and-a-half-hour window, even though Bitcoin trades 24/7. This dynamic could be reshaping risk pricing strategies.
The data supports this theory. BridgePort's analysis reveals a 11% increase in trading costs during weekends, with a 9% decline in effective depth for $100,000 trades and a 5% drop in displayed liquidity. Kaiko's data shows that weekend trading volume has decreased to 16% of total volume in 2025, compared to 25% in 2018, with activity now centered around the New York afternoon session. During recent weekend sell-offs, forced liquidations occurred on platforms like Hyperliquid as market makers retreated, and ETF flows, usually active during the week, were notably absent. Investors have withdrawn over $7.5 billion from US-listed Bitcoin funds since October 10, removing a significant source of natural support.
Derivatives markets further emphasize this trend. Options tied to US-listed Bitcoin and Ether ETFs have surpassed crypto-native venues, with contracts linked to BlackRock's iShares Bitcoin Trust and ETHA accounting for over half of total options volume. Bloomberg data reveals record trading in options linked to the iShares Bitcoin Trust during last week's sharp sell-off, when Bitcoin experienced its worst one-day drop since the FTX collapse. As volatility pricing and hedging concentrate during US hours, positions established during the week may become more vulnerable when US markets close, potentially contributing to the Monday catch-up effect observed by some market participants.
