The recent trend of cryptocurrency markets plummeting during weekend risk-off events has sparked concern among investors and analysts. Defiance Capital's CEO Arthur Cheong has spoken out against the influence of traditional finance on crypto markets, suggesting that institutional capital is using crypto as a short hedge.
Cheong's comments come after Bitcoin and Ethereum suffered significant losses following Israel's announcement of a preemptive strike on Iran over the weekend. The price drop was not limited to crypto, with other risk assets also experiencing losses.
However, unlike traditional markets, which are closed until Monday, crypto markets are exposed to wild swings in value during this period. Thin liquidity and a rush to dump assets ahead of the stock market's opening contribute to the problem.