Traditionally, Wall Street traders have approached weekends with a sense of trepidation, as they are unable to adjust their positions or react to market-moving events in real-time. However, the rise of 24/7 crypto markets is changing this dynamic, as traders can now use perpetual futures contracts to hedge their bets and react to events as they unfold, even on weekends. This shift has significant implications for the traditional finance industry, as it challenges the long-standing assumption that weekends are a time of inactivity. As one expert noted, 'Risk, geopolitical or not, does not know what day of the week it is,' and traders are now able to respond to this risk in real-time, rather than being forced to wait until traditional markets reopen.
The growth of perpetual futures contracts on crypto exchanges has been particularly notable, with platforms such as Hyperliquid and Binance reporting significant increases in trading volume. This trend is likely to continue, as more traders become aware of the benefits of 24/7 trading and the ability to hedge their positions in real-time. As the head of digital assets at Mysten Labs noted, 'From about lunchtime, the desk basically stops thinking about making money and starts thinking about what they can live with for roughly forty-eight hours until the Sunday evening reopen.' This mindset is now changing, as traders are able to use perpetual futures contracts to manage their risk and respond to market events in real-time.
The implications of this shift are far-reaching, and are likely to have a significant impact on the traditional finance industry. As one trader noted, 'You have more touch points for picking up and laying off risk over the weekend than you had before.
You had zero [places to hedge] before, and now you have more than zero.' This increased ability to manage risk and respond to market events is likely to lead to increased trading activity and volatility, as traders are able to react to events in real-time. However, it also raises important questions about the infrastructure and systems that support 24/7 trading. As the CEO of Bitget noted, 'The main issue is not really that they can't, it's probably more like they don't see it as profitable enough for them to invest … at least not yet.' This lack of investment in infrastructure and systems is a significant barrier to the adoption of 24/7 trading, and will need to be addressed in order for the industry to fully realize the benefits of this trend.
Despite these challenges, the growth of 24/7 trading is likely to continue, and will have significant implications for the traditional finance industry. As the head of the CME noted, 'I think that markets will be 24/7 down the road.
All markets.' This shift will require significant changes to the way that traders approach weekends, and will likely lead to increased trading activity and volatility. However, it also presents opportunities for traders to manage their risk and respond to market events in real-time, and is likely to have a significant impact on the traditional finance industry.