Stock market splits

Author: Prathik Desai

Translated by: Block unicorn

Foreword

A clock is not a cure-all for latency. For decades, financial markets have been built around the speed at which existing information can be transmitted. They introduced closing bells, batch settlement, and regional exchanges—reasonable choices in an era when information moved slowly. But all of that has changed. Capital will not wait. Just as water always finds a gap, capital does too. Financial gravity pulls it toward the path that delivers price information fastest. That’s the market rule. Market participants won’t tolerate inefficiency forever.

That’s what I’ve seen over the past few weeks from a macro perspective as financial markets have evolved.

In today’s article, I’ll help you understand what broke the old, bundled structure of financial markets and turned it into a more efficient, unbundled structure—one that can cross locations, packaging, and time.

A Shift in Operations

I’ve been studying finance for more than ten years. In the early stages of my learning, I treated traditional securities exchanges as synonymous with “the market.” For much of their history, exchanges have been the place where everyone and everything converges: buyers, sellers, regulators, and the technology that drives the market. There are indexes that track constituent stocks, and clocks that indicate trading hours—telling everyone when they can trade and when they cannot.

But this has changed in the past few years. In fact, just over the past few weeks, we’ve already seen multiple developments that confirm this shift.

On March 18, S&P Dow Jones Indices licensed the S&P 500 index to Trade[XYZ], allowing HIP-3 market makers to launch the first—and only—S&P 500 perpetual derivatives contract on the Hyperliquid exchange. The S&P 500 index is the most closely watched U.S. large-cap stock index globally, tracking 500 leading U.S. companies, covering roughly 80% of the total U.S. market capitalization, with a market cap of more than $61 trillion. The index covers at least half of global stock market capitalization.

It’s an index with nearly 70 years of history—yet it’s being listed in a market that was established just 6 months ago.

The day after S&P announced this news, the U.S. Securities and Exchange Commission (SEC) approved Nasdaq’s application to trade and settle certain stocks in token form. Nasdaq is one of the most active trading venues in the world; its nominal trading volume typically exceeds that of the New York Stock Exchange (NYSE), which is the largest exchange globally by market capitalization.

On March 16, Cboe Global Markets filed a proposal with the U.S. Securities and Exchange Commission (SEC) to launch “nearly around-the-clock (24x5) U.S. stock trading.” The largest operating entity behind this U.S. financial exchange said it is ready to provide round-the-clock stock trading services as early as December 2026.

But why is this happening? More and more people are demanding extended trading hours for U.S. stocks.

These three initiatives target an outdated, bundled trading structure. The S&P 500 futures trading market launched by Hyperliquid challenges the decades-long convention that investors can only trade traditional indexes through traditional markets. It also makes possible trading, 24/7, of one of the most tracked large-cap benchmarks globally.

Nasdaq’s tokenized stock trading initiative is aimed at infrastructure. It introduces a new packaging format that allows the same stock to be traded in different ways. Earlier attempts at tokenized stocks were criticized by the industry.

Investors have questioned whether these tokens come with the same rights as the original shares.

But if I can provide the same equity exposure through tokens on a blockchain—without losing the voting rights and legal protections that come with existing dematerialized shares—wouldn’t you accept that?

Why would you do this? What would it do for you?

So what if you’re an investor located outside the U.S., and you want easier access to the stock market of the world’s largest economy? And what if tokenized stocks make it easier to integrate with collateral and lending systems?

When you factor in around-the-clock trading, these advantages multiply.

That’s what Cboe is pushing back against. Its near 24/5 trading plan—five days a week, 24 hours a day—is designed to acknowledge that capital doesn’t wait for office hours. Traders always want to express their views immediately after getting the information. If Cboe doesn’t provide a market where they can express those views, traders will flock to other platforms that do.

Everything I’ve said is not hypothetical, and not “something that might happen someday soon.” It’s happening—right now, as we speak.

A Split Future

In Hyperliquid’s HIP-3 market, the adoption of financial product unbundling is most evident—this market only officially launched in late October 2025.

Just in the past month, HIP-3’s cumulative trading volume has increased by $72 billion. The previous four months’ cumulative volume was $78 billion.

In March, Trade[XYZ]’s perpetual markets on traditional financial instruments and stocks continued to account for 90% of HIP-3’s daily trading volume. But that’s not the most interesting part.

More than half of Trade[XYZ]’s trading volume comes from perpetual contracts markets for silver, crude oil, Brent crude, and gold.

Hyperliquid provides a unified trading venue for trading spot crypto as well as perpetual contracts for both crypto and traditional assets. This not only streamlines trading workflows on a single platform, but also brings higher liquidity, a unified user interface, and tighter bid-ask spreads.

Traders still want to trade some of the largest and hottest assets—commodities, public companies, large private firms, and indices. You might want to trade silver, gold, crude oil, Tesla, Apple, Amazon, Google, an index tracking the top 100 non-financial U.S. companies, and the S&P 500 index—all of which can be done on the Hyperliquid platform.

HIP-3 separates the functionality of investing in these assets from the existing exchange infrastructure, while still tracking their underlying benchmark asset. So when you go long a silver futures contract on HIP-3, the underlying asset it tracks is still linked to the value of one ounce of silver from the Pyth data source.

Traders choose to trade silver on HIP-3 instead of on earlier platforms because HIP-3 doesn’t distinguish between U.S. and non-U.S. traders, and it doesn’t follow any specific time. Whenever there’s an event where traders want to express their views through asset pricing, HIP-3 provides the market for them—without restrictions based on traders’ geography or time zones.

Over the past few weeks, open interest (OI) on the Hyperliquid platform has grown significantly, fully reflecting the results above. OI measures the total value of open derivative positions. Unlike trading volume, which reflects trading activity, OI reflects trading commitment.

On March 1, open interest was $1.13 billion; by April 1, it doubled to $2.2 billion. This indicates that traders are confident in Hyperliquid’s perpetual contracts and are locking in capital.

These indicators show that when market access becomes easier and friction decreases, traders won’t stay loyal to any one platform or any single asset class. They will choose whatever platform can deliver volatility, convenience, and liquidity.

That’s why traditional institutions such as S&P, Nasdaq, and Cboe are taking steps to recognize this behavior.

At least two recent events demonstrate how important around-the-clock trading and market volatility are to traders.

In a Decentralised.Co tweet, Saurabh wrote: “On February 28, the U.S. and Israel struck Iran while traditional markets were closed. Within hours, the price of oil-linked perpetual contracts on the Hyperliquid platform jumped 5%, because traders digested the shock in real time.”

Just two weeks after the outbreak of war, the trading volume of oil-linked perpetual contracts surged from $200 million to a cumulative $6 billion.

One major downside of emerging platforms is liquidity. If liquidity is insufficient, bid-ask spreads can widen, putting traders at a pricing disadvantage compared with other platforms.

Last week, as U.S. President Trump was consulting with Iranian officials over “productive discussions,” the Hyperliquid platform demonstrated its strong liquidity. The newly launched S&P 500 index futures based on the HIP-3 platform can track the CME E-mini S&P 500 index futures move with precision down to the minute.

Even though the on-chain perpetual contracts are about 50–70 points lower than ES, the magnitude of price movements is quite similar.

What This Means

For decades, traditional markets have been bundled together, controlling where things happen (exchanges), when they happen (trading sessions), and what gets traded (indexes/contracts).

They chose to maintain the status quo because they failed to build the corresponding mechanisms to address inefficiencies such as time delays, trading hour restrictions, and regulatory constraints on non-U.S. investors. Instead, they covered up these inefficiencies and packaged them into procedural institutional arrangements meant to build “trustworthy institutions,” to attract investors.

People still trade and invest. It’s not because they’re stupid or because they blindly believe the narratives traditional financial markets sell. They do it because they have no choice. That started to change after blockchains appeared—blockchains provide the world with on-chain markets, making trading and investing more convenient than ever.

People saw the choice—and took it.

In the past, they didn’t care, and they won’t care in the future about changes to market structure. Whether the new structure is bundled or unbundled doesn’t matter to them. As long as traders and investors can express their views more conveniently through financial instruments—regardless of whether existing institutions are willing or not—they’ll accept the new market structure. As for whether this structure comes from traditional giants like Nasdaq, Cboe, or S&P 500, or from permissionless platforms running on blockchains, it doesn’t matter.

The financial industry keeps evolving, as it always has, and will adopt whatever structure can narrow the gap between events happening and the ability to express price views.

Big events are happening everywhere, every moment. So why should price wait until a clock starts ticking on Monday morning inside a glass high-rise building in New York to become determined?