A sudden wave of selling wiped out nearly $52 million in crypto traders’ leveraged bets on chip stocks in 10 minutes on Saturday, while the shares themselves sat idle with Wall Street closed for the weekend.
Those bets were placed through perpetual futures, contracts that track a stock’s price and trade around the clock on crypto exchanges, so traders can buy and sell chip stocks on a Saturday night.
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.
About $51.6 million in positions tied to chip stocks and semiconductor funds were force-closed between 21:22 and 21:32 UTC, according to CoinGlass data, and 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 started on Binance, according to a review of the trades by David Jeong, chief executive of trading firm Tread.fi, who placed the first large SanDisk and Micron sell orders on Binance at 21:21:59 UTC.
Less than a second later, orders hit Hyperliquid, a crypto exchange where Trade XYZ lists stock-tracking contracts, and roughly 10 addresses opened bets against six chip-linked contracts within 1.8 seconds.
1 million on Trade XYZ.
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