Seeking sigma: Time-of-the-day effects on the Bitcoin network

This research investigates and tests for the presence of time-of-the-day effects on the Bitcoin network. Results indicate that NYSE trading sessions lead Bitcoin trading activity, both on the blockchain and centralised exchanges. Effects are found to have strengthened over time, however, simultaneously diminished at the weekend indicating significant exchange interactions, and that Bitcoin has developed somewhat outside its intended design parameters and is influenced by other forces such as those originating from NYSE trading. While proponents consider Bitcoin trading to be '24/7', our findings suggest that both transaction and on-chain network activity are best described to be, at best, '12/5', presenting significant implications for traders, with regards to centralised exchange liquidity and the speed of their transaction inclusion on the blockchain. Finally, the role and influence of both algorithm and volatility traders cannot be eliminated.

Automated summary

This research finds that Bitcoin trading activity is influenced by the trading sessions of NYSE, which have strengthened over time but diminished during weekends. These findings have significant implications for traders, especially in terms of centralized exchange liquidity and transaction confirmation speed.