The share of crypto trading volumes during US hours accelerated again in January. The sudden spike in activity follows a long trend of growing influence for the US markets, but also short-term enthusiasm ahead of Donald Trump’s second presidency.
Bitcoin (BTC) and Ethereum (ETH) activity spiked during North American business hours.
The most recent spike in activity reflects the enthusiasm for Donald Trump’s second presidency, which is expected to be favourable to crypto investors.
While crypto is traded 24/7, the most active hours take cues from traditional stock exchange openings. Some researchers show most cryptocurrencies trade during the business hours of the biggest market centers around the world.
The observation of more active US trading coincides with the patterns of FiatLeak, where the USA is the biggest buyer of BTC at almost all hours.
Most of the BTC buying is in US dollars, with US-based traders leading the demand. | Source: Fiatleak
Crypto markets remain dollarized for their intuitive pricing, with a few exceptions for the Euro and several national currencies. Near-peak M2 money supply is also boosting demand for speculative investments, choosing BTC and ETH for their relative liquidity. The two assets also have robust derivative markets, which also invite localized activity.
The overlap of trading hours between Europe and the USA also translates into peak activity for BTC. The time for dramatic price moves roughly coincides with the opening hours of the London and New York stock exchanges.
The shift to traditional opening hours is also an indicator of institutional activity, where BTC buying also happens through ETF. The dominance of US-based trading volumes precedes the trend of focusing on ‘Made in USA’ crypto, ranging from local startups to locally mined BTC.
DEX activity preserves time zone correlation
The activity for BTC and ETH was based on data from centralized exchanges. However, DEX also preserves the trend for higher US-based volumes, which was already visible last year.
Solana is one indicator that the market is skewed toward US-based activity. Most of the trading days in 2024 showed a dominance of US volumes on Solana DEX.
On the Solana chain, most days saw a predominance of US-based DEX volumes. | Source: Dune Analytics
The Solana trend produced meme tokens from multiple regions. However, only a handful of days saw a spike in activity during Asian working hours. London time and EU trading may also shift toward US-based activity, to tap the growing liquidity.
Solana DEX volumes on other markets were also significant, but US activity was always the largest on any given day. The English language meme culture and communities translated into a shift to US-based traders for Pump.fun and Raydium tokens.
With a market as dynamic as Solana’s DEX, the availability of other traders is key. While DEX are open 24 hours, and some of the trades can be automated, still real traders kept to their local business hours.
Another proxy for US-based activity is the fees on Ethereum. Gas prices immediately react to higher DEX usage, especially on the Uniswap universal router contract.
US institutions boost demand
The trading volumes of BTC and ETH also reflect the inflow of institutions. Another metric, Coinbase Prime’s activity, is one of the footprints of institutions.
Significant inflows to Coinbase Prime indicate heightened OTC trading activity.
This is the preferred $BTC accumulation method for US institutions.
When the whales move, the market feels it. pic.twitter.com/5WCDHxMVhs
— Grazi (@grazi) January 17, 2025
The OTC trading volumes are separate from the on-chain and open market activity. Coinbase’s metrics reflect the behavior of both retail and institutional investors. The centralized market, brokerage and custody are capable of serving whale-sized clients.
With over 40% of crypto mining activity tied to US-based pools and physical data centers, OTC markets on Coinbase are one of the key venues for realizing profits. Coinbase has shown it has the capacity to absorb high-grade crypto trades. Recently, a whale deposited over $1B worth of BTC to one of the Coinbase addresses, with the potential to realize gains. The whale bought BTC in Q3, 2024, at rates between $54K and $57K per BTC.
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