Nearly $52 million in leveraged bets on chip stocks and semiconductor funds were liquidated in 10 minutes on Saturday while Wall Street was closed. The selling began on Binance and reached Hyperliquid within seconds. Because no real share price existed, traders were reacting to each other.
A wave of selling wiped out nearly $52 million in crypto traders' leveraged bets on chip stocks in 10 minutes on Saturday. The shares themselves sat idle because Wall Street was closed for the weekend.
The bets ran through perpetual futures, contracts that track a stock's price and trade around the clock on crypto exchanges. A trader who borrows to make a bigger bet gets closed out automatically when losses eat through their deposit, and the forced selling can push prices lower for the next trader in line.
SOXL takes the biggest hit
According to CoinGlass data, about $51.6 million in positions tied to chip stocks and semiconductor funds were force-closed between 21:22 and 21:32 UTC. About $38 million of that came from traders betting on higher prices.
SOXL, a fund that triples the daily moves in chip shares, took the biggest hit at about $12.7 million. SanDisk and SK Hynix contracts followed at about $10.8 million each.
The selling starts on Binance
A review of the trades by David Jeong, chief executive of trading firm Tread.fi, showed the selling started on Binance. Jeong placed the first large SanDisk and Micron sell orders there at 21:21:59 UTC.
Less than a second later, orders hit Hyperliquid, a crypto exchange where Trade XYZ lists stock-tracking contracts. Roughly 10 addresses opened bets against six chip-linked contracts within 1.8 seconds. Binance handled about $21.9 million of SanDisk trading in that first minute, against $3.1 million on Trade XYZ.
Memory-chip shares were already coming off a rough week as investors weighed new competition from Chinese chipmaker CXMT.
No share price to follow
With the stock market shut, these contracts had no real share price to follow, so traders were reacting only to each other. Trade XYZ's rules let trading on the platform set its own reference prices until outside stock quotes come back.
Those quotes return when U.S. markets open Monday. They will show how far Saturday's prices strayed from where the shares actually trade.
Source: CoinDesk
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