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This commentary was written by Jianing Wu, with contributions from Su Lee and Alex Thorn.
Crypto Holds Up as Markets Strain
The U.S.-Iran conflict dictated the macro narrative last month: oil surged, gold fell, equities closed out their worst quarter since 2022, and BTC quietly finished higher.
Brent crude surged from roughly $81 a barrel to above $118 by month end, and national gasoline prices crossed $4 a gallon for the first time since 2022. The S&P 500 fell 5%, logging five consecutive weeks of losses. Tech stocks entered correction territory, the VIX index surged above 30 in late March, and appetite to buy the dip remained notably absent. Gold had one of its worst stretches in over a century, falling for nine consecutive sessions. It dropped roughly 12% in the month and 16% from its January peak.
Against this backdrop, crypto's performance was notably resilient. BTC began March at $66,723, surged above $75,000 mid-month, and closed at $68,193. Compared to equities and gold, BTC modestly but meaningfully outperformed. The broad crypto market followed a similar pattern, including ETH rising from $1,958 to $2,143.
BTC ETF flows told the most constructive part of the story. March was the first month of positive U.S. spot BTC ETF inflows since November 2025, with approximately $1.27 billion in net inflows despite a 30% spot price drawdown from BTC's January peak. U.S. spot ETH ETFs remained in outflow territory at -$203 million, though Solana spot ETFs added $49 million, extending their unbroken inflow streak since debuting in October 2025.
On the regulatory and institutional front, March delivered a series of positive developments. The SEC released landmark guidance explicitly defining which digital assets are and are not securities, and approved Nasdaq's rule change allowing tokenized settlement of certain securities under a DTCC pilot program. The CFTC signaled a regulatory pathway for true perpetual futures in the U.S. Kraken became the first crypto firm to receive a Federal Reserve master account. The pace of integration between traditional finance and crypto accelerated markedly in March, even with macro conditions at their most hostile.
001 24-7 Oil Trading on Hyperliquid
Escalating U.S.–Iran tensions in late February triggered the closure of the Strait of Hormuz, through which roughly 20% of the world's daily oil supply flows. The conflict escalated sharply over the weekend of March 7-8, when a fresh wave of strikes hit Iranian oil infrastructure including depots in Tehran. In this uncertain and tumultuous context, onchain infrastructure emitted valuable signals.
Without blockchains, investors would have had to wait for the CME (which runs 24-5, not 24-7) to reopen on Monday, March 9, to gauge the conflict’s impact on oil prices. But continuous, round-the-clock trading on crypto-native perpetual futures platform Hyperliquid allowed for immediate, uninterrupted price discovery as geopolitical events unfolded outside traditional exchange hours.
By that Monday, Hyperliquid’s WTI crude oil perpetual contract - CL-USDC- had recorded $1.9 billion in trading volume, briefly surpassing ETH to become the second-most traded asset on the platform behind BTC over a 24-hour window. Open interest climbed toward $300 million over the following days.
CL-USDC is a perpetual swap: a synthetic derivative with no expiry that uses periodic funding payments between longs and shorts to anchor its price to the underlying commodity. It provides up to 20x leverage. Pricing is derived from Hyperliquid’s oracle system. CL-USDC was launched on Jan. 9 by Felix Protocol, a third-party deployer operating under Hyperliquid’s HIP-3 framework. HIP-3 allows sufficiently capitalized builders to deploy perpetual futures markets directly onto the protocol without centralized approval.
Traditional WTI futures on CME typically handle tens of billions in daily notional volume, and saw volumes surge to approximately 3.9 million contracts on March 9 as traditional markets reopened. . The crude oil episode is part of a broader convergence between decentralized infrastructure and traditional financial markets. On March 18, S&P Dow Jones Indices licensed the S&P 500 to Trade.XYZ, enabling the first official perpetual derivative on the index, giving investors leveraged exposure to the benchmark through a digitally native, 24/7 product using direct institutional-grade index data. In a world where market-moving events occur at all hours and information travels instantly, price discovery is shifting toward continuous, 24/7 markets enabled by blockchain infrastructure.
002 Wall Street Exchanges Move Into Tokenized Assets
As competition around 24/7 trading intensifies, major exchange operators are increasingly positioning tokenized equities as their entry point into always-on markets. ICE (parent of the NYSE) and Nasdaq have each announced a series of partnerships that collectively signal a deeper convergence between traditional market infrastructure and blockchain-based systems.
Building on its January announcement of a tokenized securities platform, NYSE confirmed Securitize as its first digital asset transfer agent, responsible for issuing native tokenized equities. The platform will operate as a separate venue from the core exchange but is designed to maintain full fungibility with traditionally issued securities. It will also support near-instant settlement via stablecoins.
ICE’s parallel partnership with OKX, a crypto exchange with over 120 million global users, highlights a broader distribution strategy. ICE will license crypto pricing data from OKX to support new regulated U.S. futures products, while OKX users gain access to tokenized NYSE-listed securities and related derivatives. The partnership expands ICE’s crypto product suite while simultaneously establishing a global, retail-facing distribution channel for tokenized assets.
In parallel, ICE’s $1.6 billion investment in Polymarket reflects a familiar strategic playbook. Polymarket, which generated over $63 billion in trading volume in 2025, provides a new form of monetizable data on prediction market sentiment. This mirrors ICE’s 2015 acquisition of Interactive Data Corporation, which helped build its fixed-income data franchise. The underlying thesis is that prediction market data could become as embedded in institutional workflows as traditional pricing data.
Nasdaq has taken a somewhat different approach but is pursuing a similar end state. Following SEC approval of a rule change this year, Nasdaq plans to introduce tokenized equities directly on its flagship exchange, with a distinguishing “tokenization flag” rather than a separate venue. Settlement will remain within the DTCC framework, supported by an ongoing blockchain pilot, preserving much of the existing market structure.
To support distribution and infrastructure, Nasdaq has partnered with Payward (Kraken’s parent company). Payward will serve as the primary distribution and settlement layer in eligible international markets, while Kraken’s xStocks platform will provide the tokenization technology. The initial rollout of tokenized equities is expected in the first half of 2027.
ICE
Nasdaq
Venue
Separate digital securities venue
Existing exchange with tokenization “flag” to differentiate from traditional shares
Tokenization Type
Native allowed; mints token at issuer level
Wrapped tokens representing traditional shares
Settlement
Instant settlement using stablecoins or tokenized deposits (Circle partnership to use USDC and USYC)
T+1 settlement maintained. DTC remains as a centralized clearing house.
Infrastructure Upgrade
Heavy; new venue, new clearing arrangement. Securitize partnership for native token minting and digital transfer agent setup
Stepping back, both exchanges are executing a familiar strategy: partner or invest to establish infrastructure, then extract recurring fees once the market scales. ICE’s mortgage technology segment, now generating over $2 billion annually built from series of acquisitions from 2018 to 2023, provides a clear precedent. Nasdaq’s acquisition of Adenza reflects a similar long-term commitment to infrastructure-driven revenue. In both cases, these are multi-year bets that are unlikely to materially impact earnings in the near term, particularly through 2027.
The regulatory backdrop determines what will drive success. A more permissive SEC stance on digital asset market structure, DTCC’s active exploration of blockchain-based settlement, and Kalshi’s 2024 legal victory over the CFTC have collectively lowered barriers that previously constrained institutional adoption.
At the same time, the relationship between traditional exchanges and crypto-native platforms is shifting from competition toward collaboration. Traditional exchanges contribute regulatory credibility and institutional liquidity, while crypto platforms offer global retail distribution and continuous market access. Partnerships with OKX and Kraken reflect a recognition that distribution in tokenized markets is unlikely to be won independently. While the ultimate allocation of economic value remains uncertain, the current trajectory points toward integration rather than displacement.
Across Europe, similar efforts are further along in practice. Deutsche Börse’s Clearstream D7 DLT platform is operational, supporting CSDR-compliant tokenized Eurobond issuance, with €44 billion processed through earlier iterations. Börse Stuttgart has also been an early mover. While market fragmentation in Europe limits scale, these platforms demonstrate that blockchain-based issuance and settlement can function within a regulated framework, providing a working model that U.S. exchanges are now beginning to replicate.
003
Beyond exchange-led initiatives, a broader convergence between crypto and traditional capital markets is underway, reflected in a wave of announcements over just the past four months:
The DTCC received a no-action letter from the SEC in December for tokenized securities and announced a strategic partnership with Canton Network.
JPMorgan announced plans to bring JPM Coin to Canton, launched JPMD (its bank-issued USD deposit token) on Base, and launched the MONY tokenized money-market fund on Ethereum.
Wells Fargo filed a trademark for WFUSD covering crypto trading, payments, and tokenization.
JPMorgan, Bank of America, Citigroup, and Wells Fargo were in discussions to develop a joint stablecoin using infrastructure from Zelle's operator and The Clearing House.
Morgan Stanley filed for BTC, ETH, and SOL ETFs and is planning spot crypto trading on E*TRADE in H1 2026 via Zero Hash, with a proprietary wallet coming later in the year.
Goldman Sachs CEO David Solomon said the firm is ramping up research on tokenization and prediction markets and is exploring crypto lending.
Charles Schwab is preparing to offer spot BTC and ETH trading and is exploring a stablecoin launch.
Citigroup plans to launch institutional BTC custody this year. State Street announced a digital asset rollout. BNY Mellon began tokenizing deposits onchain. Truist began offering spot BTC ETFs to private wealth clients. Deutsche Bank is preparing to launch crypto custody.
The OCC granted conditional trust bank charters to BitGo, Circle, Fidelity Digital Assets, Paxos, Ripple, and most recently, Coinbase.
The great convergence of crypto and capital markets is underway. Most if not all the big banks and brokerages are engaged at various levels in efforts to integrate and adopt blockchains. That fact alone is a major milestone, even if some of them are more innovation theater than earnest endeavors.
But a fascinating tension is emerging. While these firms are all building crypto products, their main lobbyists are actively obstructing progress in Washington. The CLARITY Act stablecoin rewards negotiations are one well-known instance, but not the only one.
The Guardian reported that the Bank Policy Institute is considering suing the OCC over national banking licenses granted to crypto firms. The banking lobby is raising alarms about Kraken's new Federal Reserve master account, a harbinger of the proposed “skinny” account, and may sue the Fed over the issue. It's hard to take those fears seriously — the effort looks more like moat protectionism. And since this was primarily a story about Kraken, it’s worth pointing out that Citadel invested $200m in the exchange and tokenized-securities company but has simultaneously been criticizing tokenized securities and counseling the SEC against allowing them through both paid research and scary letters to the SEC.
It appears empirically true that the big banks and financial incumbents are delaying crypto regulatory clarity while simultaneously racing to catch up on crypto and blockchain products. If this is a deliberate strategy (and not another example of “left hand, meet right hand”), it would make sense. Banking is among the most regulated and shielded industries on earth. Clayton Christensen famously argued in The Innovator's Dilemma that incumbents fail not because they ignore new technologies, but because they absorb innovations into legacy business models rather than let those innovations disrupt their economics — and the banks' simultaneous embrace of blockchain technology and obstruction of blockchain-native competitors suggests they are following that playbook to the letter.
Regardless of this tension, or the possibility that some traditional firms are LARPing rather than innovating, crypto and blockchain technologies are now definitively embedding themselves in the capital markets. There is a palpable sense of inevitability emanating from the financial services industry – spanning from formal announcements to internal meetings to vendor selection processes to conversations over after-work martinis.
But while the inevitability of this convergence is clear, the outcomes are not. Where the push and pull between centralization and decentralization lands, and who captures the most value from this great convergence – crypto or TradFi – remains an unfinished story, and one that undoubtedly will be characterized by battles in Washington, in the marketplace, and onchain.
004 Our Takeaways and Predictions
Nearly a week into April, the macro overhang has not been resolved. Iran talks remain inconclusive. Oil prices remain elevated. The Fed is torn between supporting growth and fighting inflation. Equity momentum is negative. Q1 was one of the weaker quarters for risk assets in recent years.
But crypto enters the new quarter with several internally supportive dynamics: leverage is disciplined, ETF demand has proven durable through a genuine stress test, and BTC's relative performance through this episode has been meaningfully strong. In the near term, this combination of factors likely translates into a more range-bound environment, but one where BTC continues to trade from a position of underlying strength.
Key Events to Watch:
April 27: Bank of Japan Rate Decision
April 29: FOMC Interest Rate Decision
April 29: European Central Bank Rate Decision
April 30: Bank of England Rate Decision
Key Macroeconomic Data Releases:
April 8: FOMC March Minutes
April 9: PCE
April 10: CPI
April 14: PPI
April 15: Beige Book
To learn more about the topics covered in this month's newsletter, contact our team or reach out to your Galaxy representative.
