Bitcoin continues to trade even when Wall Street stops. Independence Day turns its design choices into market demonstrations.
The official exchange calendar lists all markets on the New York Stock Exchange as closed on Friday, July 3, and the Nasdaq lists the U.S. stock and options markets as closed for Independence Day. Bitcoin, on the other hand, can be freely traded 24/7 on hundreds (if not thousands) of exchanges, wallets, and apps.
This setting makes the nickname “freedom money” very apt. Bitcoin does not require bank branches, US exchanges, or ETF trading days to continue to settle payments around the world. But that same independence means price discovery will remain running while some of the nation’s largest institutional access channels are taken offline.
The fundamental problem with traditional currencies is the trust required to make them work. Central banks must be trusted not to devalue currencies, and the history of fiat currencies is full of violations of that trust.
Satoshi Nakamoto wrote that line in a post on the P2P Foundation in February 2009, and the quoted text still explains why Bitcoin supporters reach for Independence Day text.
The phrase “freedom money” appears, at least early on, in Hector Rosencrance’s July 4, 2020 essay on Bitcoin and the First Amendment. and later acquired a broader human rights framework. Through writers such as Alex Gladstein.
ETF suspension
However, the Holiday Benchmark is mechanical rather than philosophical. The latest Bitcoin ETF flows show that the US Spot Bitcoin fund has fluctuated from net outflows of $222 million on June 30th and net outflows of $296 million on July 1st to inflows of $223.5 million on July 2nd. Then, a U.S. market holiday wiped out the usual exchange-traded fund window, just as Bitcoin itself continued to move.
The same function now does two jobs. Holders and traders around the world can access it even when the New York Stock Exchange and Nasdaq markets are closed. Creation and redemption of ETFs in the United States stock market liquidity, Traditional market-making capabilities are suspended or diminished.
Banking transactions are also more complex than a simple on/off switch. The Federal Reserve Department of Financial Services said in its holiday schedule that Federal Reserve banks and branches will be open the Friday before if a Saturday is a holiday, while Fourth of July processing will be paused late July 3 and resumed July 5. In reality, payments and banking services will move to a holiday schedule while Bitcoin’s payments clock continues to tick.
This will give you a clearer answer than either side of the argument would normally want. While Bitcoin’s always-on design is highly advantageous during the US holidays, it can also become a holiday liquidity trap if price movements accelerate while ETF buyers and traditional liquidity providers are absent.
The test of the weekend will be whether BTC can maintain orderly price discovery when the very rails that helped institutionalize the asset are lacking to absorb movement.
(Tag translation) Bitcoin
