Hedge funds originally built to trade cryptocurrencies are increasingly applying their strategies to traditional asset classes such as crude oil, copper and equity indices, as always-on trading platforms broaden beyond digital tokens, according to a report by Bloomberg.
These firms, which developed around crypto markets operating continuously without centralised clearing or fixed trading hours, are now leveraging the same infrastructure and quantitative approaches to exploit inefficiencies in commodities and macro assets.
Platforms including Hyperliquid, Ostium and Lighter—initially designed for crypto speculation—have seen growing volumes in contracts linked to oil, metals and equities. In some cases, traditional assets now account for the majority of trading activity, with weekend sessions increasingly providing early signals for global markets before conventional exchanges reopen.
The shift comes as returns from core crypto strategies, such as futures basis trades and stablecoin lending, have compressed significantly due to greater institutional participation. As those opportunities have diminished, managers have redirected capital toward markets where pricing gaps remain more pronounced.
These 24/7 venues are enabling a form of “real-world asset” trading, where commodities and indices are traded in tokenised or perpetual contract form and settled using blockchain-based infrastructure. Traders say this structure allows them to identify dislocations between related assets or across venues, particularly during periods when traditional markets are closed.
One example cited by market participants involves spread trades between related commodities, such as taking opposing positions in silver and copper when pricing distortions emerge due to uneven leverage and positioning across assets. Such strategies are being run with relatively small allocations for now, but some managers expect exposure to increase as liquidity deepens.
Industry surveys suggest a growing share of hedge funds expect activity on these platforms to shift toward non-crypto assets, with many anticipating a more balanced split between digital and traditional instruments over time.
Managers argue that the appeal lies in structural inefficiencies: differences in trading hours, fragmented liquidity, and pricing mismatches between on-chain venues and conventional markets. These gaps can create short-term opportunities for market-neutral strategies, particularly for quantitative funds accustomed to arbitrage-style trading.
However, the expansion is not without constraints. Firms highlight limitations in connecting positions across crypto-native platforms and traditional brokerages, which restricts capital efficiency and risk management. Liquidity also remains relatively shallow compared with established exchanges, and price stability can be affected by volatility in underlying reference data.
Despite these challenges, the market for tokenised real-world assets has expanded rapidly in recent years, reaching tens of billions of dollars in value, according to industry data providers. Advocates say this growth reflects increasing institutional interest in blockchain-based market infrastructure, even if it remains small relative to traditional financial markets.
Risk considerations remain significant. Unlike regulated commodity exchanges, many of these venues operate with limited oversight, and leveraged positions can be vulnerable to rapid liquidation if pricing feeds or collateral values shift unexpectedly. Concerns have also been raised about the consistency and reliability of tokenisation frameworks across platforms.
Still, for many hedge fund managers, these frictions are part of the appeal. Inefficiencies tend to diminish in mature markets, they note, whereas newer, less standardised venues continue to offer opportunities for arbitrage and relative-value trading.
