Wondering if crypto markets ever close? While the stock market is open from 9:30 am to 4 pm Eastern with some holiday breaks, the crypto market does not have set times to open and close. You can trade virtual currencies 24/7 using crypto apps. Many investors and traders enjoy trading crypto assets because of the limitless access. However, no closing hours can create some risks and concerns.
The Cryptocurrency Market
The cryptocurrency market is far more than just Bitcoin and Ethereum. Investors and traders can buy and sell thousands of cryptocurrencies. You can find virtual currencies, utility tokens, meme coins, and other assets on crypto exchanges. Most of these assets are high risk, but they can present substantial upside. For example, the price of Bitcoin has a long history of crashing over 50% in multiple years, only to reclaim all of those losses and continue to appreciate over time. Many cryptocurrencies have crashed and created uncertainty, but if history is any indicator, cryptos can reclaim their all-time high prices in the future.
How Does Cryptocurrency Trading Work?
Crypto traders benefit from high liquidity that enables rapid transactions. Just like with stocks, you can buy crypto instantly and sell it in a few seconds. In addition, Crypto traders capitalize on short-term trends and price fluctuations to generate high returns.
Most crypto traders buy cryptos and wait for them to go higher before selling. A few traders short crypto, effectively betting on a decline. Not all brokerages support shorting crypto, and it’s too risky for most traders since you can have unlimited losses. When you buy crypto and enter a long position, you can only lose as much as you put into the investment. Most traders never put themselves in that position as they cut their losses.
It’s easier to cut losses with crypto than with stocks. If you sell a stock at a loss, you can only realize the loss for tax purposes if you do not repurchase the same shares in the next 30 days. After those 30 days pass, you can repurchase shares without losing the tax deduction on an unprofitable investment. Some people buy a similar asset while waiting for the 30-day deadline (i.e., a NASDAQ ETF investor uses those proceeds to buy an S&P 500 ETF).
Cryptocurrency losses are not subject to the 30-day wash sale rule. You can sell Bitcoin at a loss and immediately repurchase Bitcoin. Even with this arrangement, you can still report the net loss and get a tax deduction. This advantage is more advantageous for traders who make a flurry of investments, with some of them yielding losses.
Do Crypto Markets Ever Close?
Associates within a central authority agree on the stock market’s hours of operation and holidays. Cryptocurrency markets are decentralized and always remain open because of this structure.
Trading Hours: Crypto vs. Global Market vs. FOREX
Asset classes have different trading hours. We will reveal how crypto trading hours compare with other markets.
Crypto
Crypto markets never close. You can trade on them 24/7 on crypto apps with access to a cryptocurrency exchange.
Global Markets
Global markets are also open 24/7, but the global markets have several regional and continental markets with varying opening and closing times. The U.S. Stock Market opens at 9:30 am Eastern and closes at 4 pm Eastern. The Tokyo Stock Market opens at 8 am Japan Standard Time and closes at 11:30 am for an intermission. The market resumes from 12:30 pm to 5 pm.
Investing in global markets gives you 24/7 access to your assets, but only in brief segments. You cannot sell your U.S. assets when the market closes and after-hours conclude. However, you can sell assets tied to other parts of the global market.
FOREX
FOREX markets follow a clear schedule with a weekend break. Investors can trade FOREX assets from Sunday at 7 pm Eastern to Friday at 7 pm Eastern. This structure does not provide an end-of-the-day break you would find in a stock market, but weekends are mostly clear.
Pros and Cons of Being Open 24/7
Are you considering entering the crypto market for its 24/7 hours? We will share some of the pros and cons of a market that never sleeps.
Pros
- You can make money at any time: You can trade crypto at the start or end of the day and make money. People with 9-to-5 jobs can miss out on stock trades, but crypto’s hours provide more flexibility. Keeping track of spending and making frequent investments can increase your total returns.
- Quickly react to market news: If negative information drops after the stock market closes, you will have to hope luck is on your side and your asset doesn’t fall out of the green. Crypto traders can respond to news in real time instead of waiting for the market to open. This dynamic helps the early birds catch the worm and also applies to good news.
- High liquidity: You can exit your crypto at any time, even when most of the people in your country are asleep. Crypto is a global market, and other traders are in the middle of their days when most people in your area are wrapping up.
Cons
- Crypto trading can take up a lot of time: You don’t want crypto trading to take over your life. Since the markets stay open, some investors do not have an off switch.
- Volatility when you sleep: Your crypto can rise or fall overnight. Stocks maintain their prices overnight and change at the start of the day. Less regulation makes traders more likely to miss dramatic overnight price swings.
- Impulsive decisions: Weekends and closing hours give stock investors more time to think about their investments instead of making quick, emotional decisions. Having extra time to think can lead to better-investing decisions. You can step away from your crypto and think it over, but an open market makes it easier to act on your impulses.
Are There Certain Days or Times When It’s Better to Trade?
Every day presents opportunities, but some days are better than others. Most traders are active on weekdays, with the best times between 12 pm and 2 pm Eastern.
How Weekends Affect Cryptocurrency Trading
Weekends are less favorable for crypto markets since many traders step away and usually have less money to invest. Weekend trading has several negative dynamics that can quickly turn into an uphill battle for traders.
Trading Volume
Even though crypto markets remain open on weekends, some investors still take time off. Volume drops over the weekend as people take a break from trading, and this creates downward pressure on crypto prices. While crypto can increase over the weekend, a reduced trading volume often makes it difficult.
Margin Trading
When crypto prices decrease, margin traders receive margin calls. These calls force traders to liquidate some or all of their positions to cover margin debt. Unfortunately, this forced liquidation floods the crypto market with additional sell orders, further hurting asset prices.
Liquidity and Hourly Mismatches
Banks close over the weekend, cutting off the critical funding source for most crypto investors. Less money in crypto markets means less volume and the inability to pursue new investment opportunities. Some crypto traders could not trade during the weekends even if they wanted to enter new positions.
