Good news for those who simply can’t peel themselves away from studying cryptocurrency charts or watching the crypto markets: Crypto trading hours are much more expansive than those of the traditional stock market.
In fact, crypto trading hours are 24-7 — the market never closes. There are some caveats, of course, depending on your individual cryptocurrency exchange of choice. This article will dive deep into crypto trading, when it happens, and how to get in on it.
How Crypto Trading Works
If you’ve had any experience with other market types, even the stock exchange, you likely already have a good grasp of how crypto trading works. Most people access the market through a crypto exchange, where buyers and sellers can meet and transact assets.
For those buyers and sellers, the exchanges simplify the trading process by showing real-time values for various cryptocurrencies (the actual cryptos on a given exchange will vary), and allow traders and investors to buy, sell, and trade. Of course investors can still spend hours poring over crypto charts, but an exchange streamlines the trading process.
For most end users, it’s pretty much the same process as buying or selling stocks in an online brokerage account.
Recommended: How to Invest in Cryptocurrency
Are There Time Limitations on Crypto Trading Networks?
Though crypto exchanges are similar to services that allow users to buy or trade stocks and other assets, there are some differences. One of the most important differences is time limitations — or, the hours of the day during which transactions can be executed.
If you’re trading assets like stocks, bonds, and ETFs, transactions are executed during the market’s open hours, and to a lesser extent, the after-hours market. That’s generally 9:30 am ET to 4 pm ET, Monday through Friday, and 4 pm ET to 8 pm ET for after-hours trading.
But some assets can be traded 24 hours per day. The foreign exchange(forex) market is an example—traders can swap currencies all day between Monday and Friday. The crypto markets are likewise much looser with trading hours, in that the crypto markets never actually close.
Cryptocurrency Trading Hours vs Stock Market Trading Hours
The stock market has set operating hours, from 9:30 am ET until 4 pm ET, Monday through Friday. The markets are closed during weekends and holidays.
Conversely, the crypto markets operate non-stop. That doesn’t necessarily mean that there aren’t certain days or times that are better to trade, of course, since the numbers of traders and overall level of liquidity in the markets can vary. But access to the crypto markets is always open.
So, you can get real-time updates on crypto prices, add some coin to your portfolio, or fine-tune your crypto day-trading strategies at odd hours, on weekends, and on holidays.
Pros and Cons of Crypto Always Being Tradeable
There are some pros and cons to the fact that there are no defined crypto market hours.
For instance, during times when fewer traders are on the market, it can affect crypto exchange liquidity, and make values more volatile (read more about the volatility of Bitcoin). Conversely, the open-ended hours of the market can make it easier to research and execute trades at your convenience.
Pros of 24-7 Crypto Trading
There are some advantages to the crypto markets always being open. These are the top benefits:
• Convenience for traders
• Higher potential returns due to bigger market and liquidity
• Access to markets anytime, anywhere
Cons of 24-7 Crypto Trading
Of course, there are also potential downsides to crypto’s non-stop market:
• Some exchanges and platforms may limit market access to certain times
• Higher risks and volatility on certain days and times
• Lack of regulated market hours means traders could miss big market movements
How Non-Stop Crypto Trading Impacts Institutions
There are some ways in which the non-stop crypto market affects institutions — banks and exchanges, in particular.
The stock market takes a break every day, and every weekend. That gives all the players in the market —individual investors and institutions — a chance to assess and reposition their assets for their next moves. But since crypto trades all the time, there are stretches during the 24-hour day when banks and exchanges are effectively closed, and money isn’t being moved around as quickly or efficiently as it would during business hours.
This can cause lags — if a crypto trader is trying to deposit money into their crypto exchange account to execute a trade at, say, 2 am ET on a Sunday night, that money won’t actually move until the next day. That has the potential to cause some friction in the markets.
In short, there’s a mismatch between the standard business hours of many institutions and the 24-hour nature of the crypto markets, which may have an effect on the markets.
How Do Weekends Affect Crypto?
The crypto markets are volatile, and even more so on the weekends. In fact, crypto values often crash during the weekends for a few key reasons:
• Less trading volume: A lot of people take the weekends off, and that includes from crypto trading. As such, the volume of trades takes a dip. With lower volume, the trades that are executed (especially big ones) can have an outsized effect on the markets — more so than during times with higher trading volume.
• Margin trading: Many traders trade crypto “on margin,” meaning that they borrow money to execute trades. And when prices drop, it may trigger a “margin call,” which means those margin traders must repay their loans. That forces traders to try and move some money around, but with banks closed on the weekends, it can make things more difficult, and in effect, potentially cause crypto values to fall further.
• Hourly mismatches and liquidity: With banks closed on weekends but the crypto markets firing away at all hours, traders may have trouble getting more money into their crypto exchange accounts. This can limit market liquidity, potentially adding yet another systemic and chaotic element to weekend crypto trading.
Are Some Days Or Times Better to Trade Crypto?
There are times and days that are generally more favorable to crypto traders to execute trades. The best times and days to trade crypto is generally “whenever works for you” but research shows that professional traders tend to be more active during weekdays.
Monday tends to be the day when traders historically see the biggest returns when trading, followed by Friday and Saturday. And as for which hours of the day are the most fruitful? Data shows that the markets are busiest around 12 pm ET.
But as with any investing, past performance and trends are no guarantee of future outcomes. There’s no promise that trading during these days or times will translate to bigger returns (or any returns) for an individual trader or investor. It’s also worth keeping in mind that these trends are likely to change with time.
The crypto markets are a wild, non-stop ride. And because they’re so volatile, it’s best to take a measured approach to trading and investing in crypto. But that said, you won’t be limited by crypto market hours, as you might when trading stocks or bonds, because cryptocurrency trading can occur 24/7, every day of the year.
If you’re looking to invest in cryptocurrency, you can trade cryptocurrency on more than two dozen coins with SoFi Invest®, including Bitcoin, Chainlink, Ethereum, Dogecoin, Solana, Bitcoin, Litecoin, Cardano, and Enjin Coin.
Find out how to get started with SoFi Invest.
Photo credit: iStock/Stefan Tomic
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