How is the risk of war priced? Predict that the market is ahead of oil prices
CoinW Research Institute Original Article Title: The Escalation of the US-Iran Conflict: Predicting How Can the Market Prioritize the Risk of an Oil Price Pricing War? Abstract This article focuses on the escalation of the US-Iran conflict into an entry point, and analyzes how a geopolitical event quickly becomes a global risk variable in the contemporary financial system. As the incident occurred over the weekend, traditional financial markets were closed, but the on-chain market is still operating. Crypto assets and on-chain commodity contracts were the first to experience sharp fluctuations, completing the first round of risk expression; predicting the market directly probabilized wars and political changes, enabling real-time pricing of event paths. After the traditional market opened on Monday, energy, US dollars, US bonds and risk assets were systematically confirmed, and risk premiums were transmitted layer by layer along the macro chain. The article points out that in a 7×24 hour digital market environment, risk is no longer priced until the opening bell rings. Geopolitics is being financialized in real time. The market not only reacts passively to events, but also participates in the pricing of risk itself as events unfold. 1. Escalation of conflict: How geopolitical events have become global risk variables Recently, the tension between the US and Iran has suddenly escalated. According to several media reports, Iran's supreme leader Ayatollah Ali Khamenei (Ayatollah Ali Khamenei) was killed in an air strike, which caused a sharp deterioration in the regional situation. The combination of military action and tough statements made the situation rapidly evolve from regional friction to the focus of global attention. Subsequently, the Islamic Revolutionary Guard Corps of Iran announced restrictions on ships passing through the Strait of Hormuz. As one of the most important energy transportation channels in the world, this key hub, which has long carried about one-fifth of the world's crude oil and liquefied natural gas transportation, once faced the risk of serious restrictions, and many shipping companies suspended traffic or chose to detour. The impact of the conflict is no longer limited to the military level. The Middle East is the core region of global energy supply. Disturbances in the Strait of Hormuz will directly drive up energy risk premiums and rapidly spread to the global market through oil prices, inflation expectations, and capital flows. As a result, this conflict has become a systemic global risk variable. It affects not only the regional security pattern, but also the balance between energy supply and demand, the dollar liquidity environment, and the risk asset valuation system. When war escalates into systemic risk, where is risk traded first? Under a structure where the traditional market operates on a timeshare basis and the on-chain market operates around the clock, the chronology of price discovery is changing. 2. Weekend time window: The on-chain market completed the first round of price findings. Notably, this escalation of the conflict occurred over the weekend. When the news broke, most of the world's traditional financial markets had already closed: spot gold quotes were suspended, crude oil futures were suspended, and the stock market was closed. Risks have arisen, but traditional systems cannot complete pricing instantly. But the on-chain market is still running, and risk sentiment has moved to a pricing venue that is still open. After news of the first sharp fluctuation and conflict in crypto assets appeared, the price of Bitcoin once approached $63,000 and then rebounded to around $66,000, completing a clear shock in a short period of time. This kind of fluctuation is not simply a safe-haven purchase or panic sell-off; it is a concentrated game of the market's risk expectations in the absence of traditional anchors such as gold and crude oil. When other assets cannot be traded, the crypto market becomes one of the outlets for risk expression. On-chain commodity contracts: Risk premiums immediately formed. During the weekend, several media reported that on the Hyperliquid platform, perpetual contracts linked to crude oil, gold, and silver rose significantly: crude oil perpetual contracts rose by about 5% to about 70.6 US dollars/barrel; gold perpetual contracts rose about 1.3% to about 5,323 US dollars/ounce; and silver perpetual contracts rose about 2% to about $94.9 per ounce. The volume of transactions also increased. The 24-hour turnover of silver contracts was over $227 million, and gold contracts were around $173 million, showing real financial participation. These are the actual prices formed in the 24/7 on-chain market, reflecting market participants' immediate judgments about supply risk and geopolitical premiums during traditional market closures. Monday opening: “Remedial course” for traditional markets When traditional markets reopen, prices quickly adjust in the direction of the weekend chain. International oil prices opened higher on Monday. Brent crude oil once rose to 82.37 US dollars/barrel, WTI crude oil jumped above 75 US dollars; spot gold surpassed 5,300 US dollars/ounce; futures of major global stock indexes generally weakened, putting pressure on risk assets. Prices showed a clear timeline: risk occurred over the weekend; the on-chain market took the lead in fluctuating; the traditional market completed larger confirmation and spread on Monday. In the time window where traditional markets close, the on-chain market bears...