The US military strike on Iran over the weekend intensified global tensions and investor anxiety. Yet, Matt Hougan, Chief Investment Officer at Bitwise, stated that it also highlighted the important role of crypto and on-chain markets.
With major stock exchanges closed, on-chain markets stepped in as the primary venue for global price discovery.
US Strike on Iran Exposed a Structural Gap That Only Crypto Markets Could Fill
In a recent memo titled “The Weekend That Changed Finance,” Hougan noted that when President Trump announced a military strike on Iran at 2:30 a.m. ET on Sunday, global markets were closed. Stocks, futures, forex, and exchanges across Europe and Asia had all gone dark for the weekend.
The only traditional markets still running were small Middle Eastern exchanges in Saudi Arabia and Qatar. Hougan suggested that on-chain markets were the only venues that responded in real time. Thus, they filled a structural void left by closed traditional exchanges.
“In years past, if a major geopolitical shock hit on a Sunday morning, investors would wait until the U.S. futures markets opened at 6 p.m. ET on Sunday to find out what the impact would be. But as this weekend showed, they now have an alternative: They can turn to crypto-based rails, which trade 24/7/365, globally. And this weekend, they did,” he said.
BeInCrypto also reported that the impact of the attacks was quickly evident in the crypto market, with Bitcoin (BTC) dropping on the news. According to Hougan, for most of that Sunday, “on-chain finance was the center of the financial world.”
He noted that Hyperliquid, a decentralized perpetual exchange, became a “focus.” Hyperliquid’s HIP-3 decentralized exchanges allowed traders to trade synthetic perpetual futures contracts tied to traditional assets.
BeInCrypto reported that HIP-3’s open interest exceeded $1 billion. Overall, the platform saw over $11.5 billion in trading volume across Saturday and Sunday, according to DeFiLlama data.
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Meanwhile, tokenized gold also drew a rush of investor interest. Tether’s XAUT logged more than $300 million in 24-hour trading volume as demand spiked. At the same time, activity on Prediction markets like Kalshi and Polymarket also surged.
“Sunday’s attacks put the spotlight on markets that never close. Don’t expect traders to forget it,” Hougan remarked.”It was the first time I remember crypto-enabled markets being ‘the market,’ full stop.”
The executive also shared that the weekend’s activity has prompted him to lower his projection of when finance would move on-chain.
“I thought that crypto-enabled markets would grow up along the edges—that, for the next 5-10 years, they would mostly serve crypto natives and others who don’t fit cleanly into the traditional financial system…The shift to onchain finance is inevitable. After this weekend, I’m convinced that shift is coming sooner than any of us had imagined,” he mentioned.
Hougan, in his analysis, also wrote that hedge funds, banks, or any other investors must now adapt to compete in global, real-time markets.
“If you are a hedge fund, bank, or any other investor who wants to trade competitively, you no longer have a choice: You have to set up a stablecoin wallet and learn how to trade on Hyperliquid. You need to understand XAUT. You need to read about tokenized stocks. Because even if you don’t, everyone else will,” he claimed.
Thus, the weekend of the US-Iran strikes showed that always-on financial markets may be moving from the margins to the mainstream, and investors are now paying attention.
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Author: Kamina Bashir
