Author: Matt Hougan, Chief Investment Officer of Bitwise
Compiled by: Luffy, Foresight News
I have always believed that the migration of the financial industry to on-chain is inevitable.
Blockchain enables assets to be traded 24/7, 365 days a year, with instant settlement at a cost far lower than traditional systems. It makes traditional stock exchanges and T+1 settlement seem incredibly outdated.
But I've always wondered: When exactly will this transition happen? And what event will catalyze a complete systemic change?
After all, most people don't even notice the delays in the current system. When my uncle buys a stock in his Charles Schwab account, he doesn't care that it takes a day to settle, nor does he care about the complex processes involving mysterious institutions like the NSCC, DTCC, and Cede & Co. He buys, the stock appears in his account, simple and straightforward, no fuss.
So I once thought that crypto-driven markets would grow on the fringes first. Over the next 5 to 10 years, they would primarily serve crypto-native users and those who don't fit perfectly into the traditional financial system, like global retail investors wanting to trade U.S. stocks. Eventually, these systems would become good enough to gradually take over the existing system, and institutions like the NYSE would transition to tokenized markets, much like they moved from floor trading to electronic trading.
It would be a classic tech story: disrupt the edges first, then take over the core. I thought this would take 5 to 10 years.
But this weekend proved me wrong. I am now convinced that this will happen much faster than anyone expected.
What Happened This Weekend
At 2:30 AM ET on Sunday, February 28th, Trump announced an attack on Iran. This timing was particularly unique for global financial markets, as almost all markets were closed.
- U.S. stock markets were closed
- U.S. futures markets were closed
- Major foreign exchange markets were closed
- European markets were closed
- Asian markets were closed
Essentially, the only markets still trading were those in Saudi Arabia, Qatar, and other Middle Eastern countries (which operate on a Sunday-to-Thursday schedule), but these markets are limited in size and coverage, with little participation from Western investors and a narrow range of assets.
In the past, if a major geopolitical shock occurred on a Sunday morning, investors would have had to wait until 6:00 PM ET Sunday when U.S. futures opened to see the market's reaction. But this weekend showed us: they now have another choice, turning to the 24/7, globally-trading crypto infrastructure.
And this weekend, they did just that.
Throughout Sunday, on-chain finance became the core of global finance. The decentralized exchange Hyperliquid, in particular, was the focal point. It offers perpetual contracts for crypto assets as well as real-world assets like crude oil.
Hyperliquid's trading volume surged so much that Bloomberg, in its coverage of the airstrike's impact on oil, directly quoted the price of the crude oil contract on Hyperliquid—it was the most relevant price. This was no coincidence; Hyperliquid's native token, HYPE, rose about 30% over the weekend. In my view, this is more like investors paying upfront for its future.
But it wasn't just Hyperliquid. The trading volume for XAUT, the gold token issued by Tether, soared to over $300 million in 24 hours. Prediction markets like Kalshi and Polymarket hit record trading volumes. Bitcoin, Ethereum, and other crypto assets were also in the spotlight.
In my memory, this is the first time the cryptocurrency market truly functioned as a "market" in the real sense.
Why This Matters
If you are a hedge fund, a bank, or any investor who wants to remain competitive, you now have no choice: you must set up a stablecoin wallet, you must learn to trade on Hyperliquid, you must understand XAUT, you must research tokenized stocks.
Because even if you don't, others will.
This trend will accelerate. The biggest barrier to participating in on-chain markets is getting used to tools like wallets, stablecoins, Hyperliquid, and Uniswap. Once you're comfortable, all the new capabilities of DeFi and on-chain finance are right at your fingertips. Exposure leads to exploration, exploration leads to trading.
Of course, some will surely say: Traditional markets can do this too! Nasdaq is moving towards 23-hour trading, 5 days a week! We don't offer 24/7 trading because no one needs it!
Fine, whatever. Blockbuster said the same thing about Netflix. Microsoft said the same thing about the iPhone.
The shift to on-chain finance is inevitable. And after this weekend, I am convinced: its arrival will be much sooner than any of us imagined.
