Geopolitical tensions following U.S. military strikes on Iran have highlighted the growing role of cryptocurrency markets in global finance, according to Bitwise Chief Investment Officer Matt Hougan. In a recent memo, Hougan argued that the conflict demonstrated how crypto and on-chain financial infrastructure can function as the primary venue for market activity when traditional financial systems are offline.
Recall that President Donald Trump announced the Iran strikes at 2:30 a.m. on Saturday, February 28, while most traditional markets, including U.S., European and Asian equities markets, futures, and foreign exchanges were closed. With limited access to conventional financial venues, traders increasingly turned to crypto markets and blockchain-based trading platforms to react to the news, according to Hougan. He said the situation effectively pushed crypto into a central role for global price discovery during the event.
Crypto Markets Operate When Traditional Markets Close
According to Hougan, the key advantage demonstrated during the geopolitical shock was crypto’s continuous trading structure. Unlike traditional financial markets, which close during weekends and holidays and are susceptible to geopolitical pressures, cryptocurrency markets operate around the clock. This allowed investors to respond immediately to breaking developments such as military conflicts, economic announcements, or political instability.
Hougan noted that several blockchain-based trading venues saw significant activity during the period. Traders seeking exposure to commodities and digital assets turned to platforms offering on-chain derivatives and tokenized assets while conventional exchanges remained shut.
One example highlighted was the decentralized derivatives platform Hyperliquid, which saw a sharp rise in trading volume during the market reaction to the strike. The platform lists perpetual futures contracts tied to assets including cryptocurrencies and crude oil, and both asset classes saw increased trading activity.
In addition, tokenized gold products such as Tether Gold (XAUT) experienced a surge in activity, recording more than $300 million in daily trading volume during the period of heightened volatility. Prediction markets also saw major action as Polymarket and Kalshi reached new volume highs. Bitcoin and Ethereum also drew increased attention, posting sizable gains.
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Institutions Need On-Chain Infrastructure
Hougan argued that the episode illustrates a structural shift in financial markets, where blockchain-based systems increasingly serve as backup infrastructure when traditional markets are unavailable. In his view, hedge funds, banks, and institutional traders may soon need to integrate stablecoins and decentralized trading platforms into their strategies to remain competitive during off-hours events.
He described the transition as accelerating rapidly, suggesting that institutions may no longer have the luxury of ignoring on-chain financial systems, because the shift to on-chain finance is inevitable. Hougan further added that the weekend’s events showed how quickly crypto markets could become a primary trading venue, correcting his former theory that the on-chain markets would simply grow along the edges for the next decade, serving primarily crypto natives.
The incident also reflects a broader trend in which digital assets increasingly function as real-time barometers for global risk sentiment. Since crypto trades continuously and is accessible worldwide, it often reacts to geopolitical developments hours before traditional financial markets reopen. As geopolitical risks and macroeconomic uncertainty continue to influence markets, crypto’s always-on infrastructure may give it a more prominent role in price discovery and capital flows.
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Temitope Olajide
The CoinRemark Team
