Bitwise’s Matt Hougan: The Weekend That Proved Onchain Markets Are the Future

An American military strike on Iran that began in the early hours of Sunday morning, US time, has shocked the world and raised concerns over heightened and prolonged geopolitical chaos in the region. But Bitwise chief investment officer Matt Hougan has found a silver lining — crypto markets saw more action.

The timing of the beginning of Trump’s war on Iran — when traditional finance markets were closed — resulted in crypto’s 24/7/365 trading accessibility coming into the spotlight and signalling an “inevitable” shift to onchain finance, Hougan said in a blog published March 3.

For most of Sunday, onchain finance was the center of the financial world.

Matt Hougan, Bitwise CIO

Hougan argues that the embrace of blockchain in finance has received an incredible boost thanks to investors being able to turn to crypto-based rails on Sunday, despite US and major FX, European and Asian markets being closed.

Related: Crypto Exodus: Iranian Exchange Sees 700% Outflow Spike After U.S.-Israeli Airstrikes

Hyperliquid, XAUT & Prediction Market Trading Spikes Reveals Crypto’s Value: Hougan 

Hougan cites the fact that a Bloomberg markets newsletter reportedly mentioned that the price of oil-linked perpetual futures being traded on Hyperliquid rose more than 4% — in lieu of having TradFi market price action to report. 

“Not coincidentally, Hyperliquid’s native token, HYPE, was up about 30% over the weekend. My read: That’s likely a down payment from investors on where Hyperliquid is going,” Hougan said.

Hougan also highlighted the performance of other crypto assets, such as:

• Tether’s tokenised gold stablecoin XAUT achieving a 24-hour trading volume of over US$300 million.
• Crypto betting sites Kalshi and Polymarket setting new volume records.
• OG coins such as Bitcoin and Ethereum being “in focus”. 

“It was the first time I remember crypto-enabled markets being “the market,” full stop,” Hougan said. 

Hougan failed to mention that while betting markets tied to US strikes on Iran helped drive trading activity on so-called ‘prediction’ marketplaces — it also resulted in significant ethical scrutiny and backlash from traders.  

Bets placed in relation to the removal of Iran’s Supreme Leader Ayatollah Ali Khamenei were flagged for potential insider trading, as well as being legally and morally questionable. Kalshi reimbursed traders for Khamenei-related bets at the “last-traded price before his death” rather than settle winnings — a move that caused heavy backlash from traders.

Related: Kalshi Faces Backlash After $50M Market on Khamenei’s Death Sparks Rule Dispute

For Hougan, the upshot of the weekend’s crypto market boon is clear: hedge funds, banks and other investors “who want to trade competitively” have no choice but to establish a stablecoin wallet and explore Hyperliquid, and understand XAUT and tokenised stocks.

He said he now believes TradFI blockchain adoption would accelerate “much faster” than his previous estimate of 5-10 years.  

The shift to onchain finance is inevitable. After this weekend, I’m convinced that shift is coming sooner than any of us had imagined.

Matt Hougan, Bitwise CIO

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