Cryptocurrencies use blockchain technology to allow users to conduct transactions between crypto wallets at any time of the day, unlike banks, which restrict users to conducting transfers only during business hours.
Since crypto trading is closely tied to crypto wallets and leverages blockchain networks to facilitate trades, crypto is far more versatile than the traditional financial market.
In this article, we’ll find out when does the crypto market close and how does it differ from the stock market and its trading hours. Also, we’ll check out how crypto trading works and how different times of the day and week impact trading opportunities.
The Difference Between Crypto Trading and the Stock Market
Today, stocks are no longer held in physical paper form, but instead, traders keep their stocks in so-called Demat (dematerialization) accounts, which are virtual accounts for storing different types of financial assets.
Crypto, on the other hand, is kept in software crypto wallet apps or hardware wallet devices by storing the private keys that prove a user’s ownership over a certain number of tokens.
With stocks, you can’t just transfer their digital representation kept in a Demat account whenever you want. You can only trade stocks on trading platforms connected to different global stock exchanges, which have strict operating hours.
Usually, the stock market operates between 9 am and 4 pm. In some global regions, the time can differ a bit depending on the local opening hours. Traders can’t buy or sell stocks when the stock exchanges that deal with these types of assets are closed.
The crypto market is the sharp opposite because blockchain networks are operating non-stop. Bitcoin (BTC), Ethereum (ETH), or any other altcoin’s blockchain is always up and running, so we can’t talk about open and closed hours here.
That’s because blockchains consist of thousands of validator nodes distributed across the globe in numerous timezones, and there are always enough nodes operating to sustain a specific crypto network. Also, the validator nodes are incentivized to stay operational at all times.
The decentralized blockchain architecture lets users freely manage their crypto portfolios at any time of the day with a crypto wallet. Unlike Demat accounts that are tied to closed electronic networks, crypto wallets are controlled by the users, who can initiate transactions between themselves at any time.
Since crypto is operational 24/7, it’s only logical that crypto trading is also available around the clock.
Cryptocurrency Trading Hours
On the crypto market, there are always users conducting transactions, and ever since the launch of the first Bitcoin exchanges in 2010, crypto trading companies have been providing services to traders at all times of the day, 365 days a year. Crypto trading is even available during the holidays.
It’s important to note that unlike stocks, whose volatility is relatively low and their price changes are meager within a 24-hour period, crypto tokens are a much more unpredictable asset class. Bitcoin’s price can considerably change in just a few hours, while low-market cap altcoins can easily witness double-digit gains or losses.
Also, the price changes of cryptos are extremely hard to predict, and even advanced users adept at technical analysis often fail to accurately estimate what will happen with a certain cryptocurrency’s price within the next few days or hours.
While real-world economic and political events certainly influence the cost of digital currencies, crypto is also susceptible to different types of price manipulations, such as organized pumps and dumps.
These crypto price changes can happen at any time of the day, and while traders in one part of the world are sleeping, crypto users in another global region are actively trading.
Since blockchains are always operational, it’s impossible to impose specific open hours on crypto exchanges and crypto trading in general. While some crypto trading strategies are time sensitive and best implemented during busy market hours when market liquidity is at its peak, other strategies can be implemented at any time of the day.
For example, crypto arbitrage traders tend to buy a certain crypto at a lower price on one exchange and then sell it on another for a somewhat higher price in minutes. This strategy often depends on the time zone difference between exchanges that operate in different parts of the world, which causes a lag in the price change of a crypto.
Why Are Crypto Exchanges Always Open and How Do They Work?
Although it’s possible to trade crypto in a peer-to-peer (P2P) manner directly between two traders, the vast majority of trading is done on crypto exchange platforms. Trading platforms guarantee the validity of trading deals and make sure both trading parties fulfill their obligations.
A crypto exchange is essentially a type of secure trading intermediary that charges fees for its services. Also, exchange platforms make it easy for traders to buy or sell certain assets because they automatically connect buyers and sellers for thousands of different cryptos.
Since there’s a 24-hour trading demand from crypto enthusiasts across the globe who want to take advantage of the fact that blockchains are always working, crypto trading companies have adopted a 24/7 operating policy.
At this point, It’s important to make a difference between centralized (CEX) and decentralized (DEX) crypto exchanges.
Centralized platforms like Binance, KuCoin, and Coinbase comprise the bulk of the total crypto trading volume. These exchanges run a privately-controlled trading business with various services that connect buyers and sellers, such as instant trading, spot, margin trading, and even crypto derivatives and futures trading.
Users need to register accounts on these platforms, and they can access them at all times of the day to engage in crypto trading. Traders can fund their accounts with fiat money through various methods, such as bank card payments or bank account transfers.
However, since banks don’t work on the weekends and have strict open hours, users can’t really make a deposit at all times.
DEX platforms come in the form of blockchain decentralized apps (dApps), and users need to connect their crypto wallets to a DEX to start trading. Major DEXs like UniSwap (UNI) and SushiSwap (SUSHI) don’t have a central entity in control. In fact, these platforms use a decentralized autonomous organization (DAO) structure that allows users to participate in the DEX’s governance. DEXs are always open, just like any other DeFi blockchain dApp.
Why Is It Better to Trade at Certain Times of the Day?
Users can engage in crypto trading at any time of the day, as they wish, but research and market data show that some hours are better for trading digital currencies. Available data shows that the most active period of the crypto market coincides with business hours in the US, i.e., between 8 a.m. and 4 p.m. during weekdays.
During this period, market liquidity is the highest, and traders won’t have any issues facilitating large-scale trading deals because there’s more than enough trading volume on popular CEX and DEX platforms.
The trading volume is extremely important to active traders who conduct multiple high-value trades within a single day. When liquidity is high, the market spreads between the buy and sell crypto prices are generally low, which means traders can purchase assets at a better rate compared to market conditions when the spreads are high. During peak trading hours, the spreads for the most popular cryptocurrencies are especially low.
It’s also essential to use a large, reputable trading platform because smaller platforms often have much higher spreads despite the generally high trading volume on the market.
For traders who aren’t very active or are looking to execute low-volume trades, it isn’t so important to catch the daily peak trading period. However, most traders who want to take advantage of the best prices should pay special attention to the market during US business hours.
Since cryptocurrencies are very unpredictable, sometimes there can be extremely profitable trading opportunities regardless of the time of the day. There can be a sudden price jump of a specific crypto just a few hours after midnight or a price fall during the daily trading hour peak.
Available data shows that the most volatile time for trading digital currencies is 4 pm UTC on Wednesdays, while the least volatile period is between 8 am and 10 am UTC on Mondays. Since the US crypto market has the highest trading volumes, the low volatility on Monday mornings is connected with the fact that it’s just before crypto traders in the US wake up.
Crypto Trading During Weekends
Crypto trading doesn’t stop during the weekends, but the trading volume is considerably lower compared to weekdays. Although the crypto market doesn’t sleep, many traders prefer to pause their operations on weekends.
On Saturdays and Sundays, crypto trading volumes drop dramatically compared to weekdays, meaning there’s far less cash flowing on the market. Consequently, it’s pretty standard for crypto prices to fall a bit during this time of the week. However, real-world economic or political events that occur during the weekend sometime may have a positive impact on crypto prices.
Experienced traders advise newcomers not to trust the weekends because historical data shows that weekend price increases are usually short-term, and prices often fall at the beginning of the week.
During such periods of low trading volume, high-value transactions can considerably impact the market performance of a particular cryptocurrency. Large, multi-million dollar transactions during the weekends can contribute to a crypto’s price change much more than on weekdays when the number of active traders is way higher.
Furthermore, crypto exchanges can have liquidity issues over the weekend because traders can’t deposit fiat currency through bank account transactions since banks only work during weekdays. Because of this, weekend trades may incur higher market spreads, and users often need to pay more for the same amount of crypto than on weekdays.
Another reason for lower crypto exchange liquidity on weekends is margin trading. Traders borrow assets from crypto exchanges to enter margin trading contracts and deposit a certain amount of crypto as collateral. If a user’s margin trade goes sideways and they need to pay back their crypto loan, many users can’t do so on Saturdays and Sundays because they can’t deposit money from their bank accounts.
The exchanges are then forced to sell the collateral to cover the loan, which means crypto is flowing out of the exchanges, thus lowering the platform’s liquidity. In total, lower liquidity creates lower crypto value during weekends.
Transaction Fees and Speed During Trading Hours
CEX platforms have clear trading fee policies that either use fixed fees or maker/taker fees that depend on a trader’s monthly trading volume. These fees are always the same regardless of the platform’s trading volume.
However, besides trading fees, users need to take blockchain transaction fees into account. Every transaction to or from a trading platform incurs blockchain transfer fees. The fees can vary depending on the blockchain you’re using.
This means that if you want to deposit some additional crypto to your CEX account or withdraw your trading profits to your private wallet, you’ll incur a fee.
Blockchain transaction fees can be very different depending on the network. For example, the Ethereum blockchain is known to be the most expensive crypto network, charging blockchain transfer fees of up to 100 USD when there’s high network activity.
At the same time, networks like Solana (SOL), Avalanche (AVAX), and Polygon (MATIC) charge just a few cents per transaction, but even these networks charge higher fees when the network is jammed with transfers.
That’s why some traders tend to facilitate deposits and crypto withdrawals during weekends or after business hours on weekdays.
To use a DEX, you need to connect your crypto wallet to the platform. All trades on a DEX are blockchain transactions. Consequently, you’ll incur a blockchain transfer fee for each trade, besides the platform’s standard trading fees.
Besides higher transaction fees, traders should also keep in mind that transactions are much slower during busy trading hours. For instance, Ethereum transactions usually take up to 5 minutes, but when traffic is high, a transfer can take up to several hours.
Temporary Blockchain Outages
Blockchain network nodes are operational 24 hours a day, but very rarely, blockchains briefly pause transaction processing to update network protocols. This is something that some blockchains manage to do without stopping network traffic, while others briefly stop operations to implement network improvements.
These outages don’t come suddenly, and developers always notify the community regarding planned network updates. Major exchanges like Binance automatically disable deposits and withdrawals for cryptos going through network updates to prevent eventual bugs and transaction issues.
However, blockchains can also suffer unplanned outages due to internal network problems. For example, Solana, one of the largest crypto networks on the market, suffered multiple significant outages, and the latest one in October 2022 lasted a whole weekend, during which the blockchain stopped processing transactions.
Since Solana is a major hub for DeFi apps and NFT marketplaces, the network’s outages have a major negative influence on crypto traders looking to profit from Solana-based assets.
Traders can’t anticipate such unfortunate events since all blockchains are made to be constantly operational.
Temporary Crypto Exchange Shutdowns
Similarly to planned blockchain outages for network updates, crypto exchanges also pause certain services periodically for maintenance purposes or to fix sudden issues. This occurs very rarely, but when it does, users can’t access some services, and it may have a major impact on crypto prices if the exchange handles a considerable amount of the market’s total trading volume.
Binance, the largest crypto trading platform in the world, temporarily paused all spot trading, as well as deposits and withdrawals, on March 24, 2023. The reason for the pause was an issue with a Bitcoin spot trading order that could only be fixed if the exchange temporarily stopped all trading operations. Although the service pause only lasted around two hours, it still sent Bitcoin’s price 2.5% down.
When a maintenance shutdown happens outside busy trading hours, it isn’t really an issue, but when a sudden outage happens during active trading hours on a weekday, the outage can disrupt thousands of traders in their daily operations.
Crypto Price Trackers
Crypto price tracking platforms like CoinMarketCap have an important role in the market because they pull data from hundreds of trading platforms to display the average trading price of all active cryptocurrencies.
The thing is that these platforms don’t fetch market data 24 hours a day. There’s something called earliest and latest data in range, which refers to the time of day when a platform starts and finishes its active daily data tracking. CoinMarketCap tracks prices and trading volume from 12 am UTC to 11:59 pm UTC.
Because of this, traders looking to facilitate trades between 11:59 pm UTC and 12 am UTC might be better off monitoring the crypto prices on their chosen trading platforms. However, the trading volume is usually low during this period, and the data from CoinMarketCap often remains relevant unless there are some sudden pumps and dumps during the night.
The Operating Time Gap Between Banks and Crypto
Traders looking to take advantage of usually lower prices during the weekends should fund their CEX accounts with fiat currency by Friday because banks don’t work on weekends.
The only way users can buy crypto with cash during weekends is by using their credit cards and debit cards because card payments are automatically validated. The issue here is that card payments incur high fees, usually between 1.99% and 4.99% per deposit, and they have low deposit limits. Bank account deposits are mostly free of charge, and users can deposit high amounts of cash this way.
The gap between the working hours of banks and the crypto market’s 24/7 availability can be quite limiting for some traders because if they don’t fund their accounts on time, they won’t be able to trade.
Benefits and Risks of the Always Open Crypto Market
Let’s have a look at the essential benefits and risks of the constantly open crypto market.
- Crypto trading is constantly available both on centralized and decentralized exchange platforms because crypto exchanges are never closed.
- Traders have more maneuvering space and convenience because they can trade whenever they want.
- Blockchains are always up and running, which means trades can go through at any time of day. Users don’t need to wait for a specific time of day to get their trades processed.
- Some times of the day and week have considerably lower liquidity, which means higher spreads for crypto trading.
- Transaction fees can be high when a lot of users are trading at the same time.
- Banks don’t work during weekends, which effectively shuts down crypto trading on Saturdays and Sundays for many traders.
The crypto market never closes, but as seen in this guide, the time of day and week makes quite a difference for a lot of crypto traders. The highest trading activity is during weekdays and US working hours, while weekends bring much lower trading volumes to exchanges across the globe.
Furthermore, crypto price trackers don’t gather data around the clock, and bank transactions for funding exchange platform accounts aren’t available on weekends. Also, sudden shutdowns of both exchange platforms and blockchains can sometimes happen and temporarily close a portion of the market.
Taking these factors into consideration will help you understand how time impacts the crypto market.