Middle East Conflict Could Push Wall Street On‑Chain Faster

• Geopolitical tensions in the Middle East may push traditional finance onto blockchain faster than expected.
• Hyperliquid, XAUT, and prediction markets saw record volumes as 24/7 trading surged.
• Wall Street may adopt on-chain rails faster as 24/7 liquidity becomes essential.

Geopolitical tensions in the Middle East may push traditional finance onto blockchain faster than expected, says Bitwise CIO Matt Hougan.

In a March 3 blog post titled “The Weekend That Changed Finance,” Hougan said recent conflict involving Israel and Iran revealed a major weakness in traditional markets: they close. Crypto markets don’t.

Weekend That Shifted the Narrative

Hougan said he previously believed it would take 5–10 years for mainstream financial systems to transition meaningfully on-chain. After the latest Middle East escalation, he has changed his view.

President Donald Trump announced U.S. attacks on Iran at 2:30 a.m. ET on Sunday, February 28 — a time when nearly all major global markets were closed. U.S. equities, futures, European, and Asian exchanges were offline, leaving investors unable to react in real time.

The only traditional markets open were smaller Middle Eastern exchanges such as those in Saudi Arabia and Qatar, which trade Sunday through Thursday. But their scale and global participation remain limited.

Crypto markets, however, stayed open the entire time. “For most of Sunday, on-chain finance was the center of the financial world,” Hougan wrote.

Hyperliquid, Tokenized Gold, and Record Volumes

One of the clearest examples was activity on Hyperliquid, a decentralized exchange that offers perpetual futures on crypto and assets like oil. Trading volume jumped so much that when Bloomberg reported on oil prices after the bombing, it used Hyperliquid’s crude contract as the main live price reference.

Hyperliquid’s token, HYPE, rose about 30% over the weekend as investors focused on platforms that allow 24/7 trading.

At the same time, XAUT, tokenized gold from Tether, saw more than $300 million in trading volume in 24 hours. Prediction markets like Kalshi and Polymarket also hit record trading volumes.

Major cryptocurrencies such as Bitcoin and Ethereum were closely watched by traders seeking real-time price updates while traditional markets were closed.

For Hougan, this was a turning point. It was the first time crypto markets weren’t just an alternative — they were simply “the market.”

Why It Matters for Wall Street

Hougan argues that hedge funds, banks, and institutional investors can no longer afford to ignore on-chain rails. When geopolitical shocks happen outside normal market hours, 24/7 trading is not just helpful; it’s necessary to stay competitive.

He pointed out that exchanges like Nasdaq are moving toward 23/5 trading, but that’s still not fully around the clock. Blockchain markets run 24/7/365. They also settle trades almost instantly and don’t rely on traditional clearinghouses like National Securities Clearing Corporation or Depository Trust & Clearing Corporation.

Hougan believes that once institutions set up stablecoin wallets and start using decentralized finance platforms, wider adoption will naturally follow. First comes access, then experimentation, then more trading volume.

Tokenization Is Picking Up Speed

Hougan’s argument aligns with a long-standing crypto belief: blockchain will eventually tokenize real-world assets such as stocks, oil, and gold. This could mean faster settlement, lower costs, and more transparency.

“The shift to on-chain finance is inevitable,” Hougan wrote. “After this weekend, I’m convinced that shift is coming sooner than any of us had imagined.”

He also stressed that crypto markets still carry risks, including volatility, cybersecurity threats, and weaker regulatory protections. Still, the weekend’s events may have permanently changed how big investors see always-on blockchain markets.

Related: When Will the US-Iran War Be Over? Insights from ChatGPT, Claude, and Grok