Crypto Traders Lose $52 Million in 10-Minute Chip Stock Sell-Off
Millions lost in 10-minute weekend sell-off
A sudden wave of selling wiped out nearly $52 million in leveraged bets on chip stocks on Saturday. The losses occurred within just 10 minutes while U.S. stock markets were closed for the weekend. These trades were made through perpetual futures, which are contracts that track a stock's price and trade 24/7 on crypto exchanges.
The sell-off triggered mass liquidations. A liquidation happens when an exchange automatically closes a trader's position because their losses have used up their deposit. Because the actual stock market was closed, traders had no official share prices to follow and were only reacting to each other's moves.
Key numbers from the liquidation event
- Total liquidations reached $51.6 million between 21:22 and 21:32 UTC.
- About $38 million of the losses came from traders betting that prices would go up.
- SOXL, a fund that triples the daily moves of chip shares, saw $12.7 million in liquidations.
- SanDisk and SK Hynix contracts each saw roughly $10.8 million in losses.
How the sell-off moved through crypto exchanges
Data from CoinGlass and a review of trades by the firm Tread.fi show that the selling began on Binance, a major crypto exchange. Large sell orders for SanDisk and Micron were placed on Binance just before the wider flush began. Within seconds, the selling spread to Hyperliquid, another crypto exchange that offers stock-tracking contracts.
During the first minute of the event, Binance handled $21.9 million in SanDisk trading. In comparison, the platform Trade XYZ handled $3.1 million. The move follows a difficult week for memory-chip shares, which have faced pressure from new competition in the industry.
Risks of trading stocks on crypto platforms
This event highlights the risks of trading stock-linked contracts when the underlying stock market is closed. On crypto exchanges, these contracts trade around the clock. When Wall Street is shut, the prices of these contracts are driven entirely by crypto traders rather than the actual value of the shares.
Trade XYZ, one of the platforms involved, allows trading on its platform to set its own reference prices during the weekend. This means prices can move significantly without any change in the real-world value of the company's shares.
Official stock prices return on Monday
The true impact of Saturday's volatility will be clear when U.S. markets reopen on Monday. The reopening will provide an official benchmark for chip-stock prices. This will show how far the weekend prices on crypto exchanges moved away from the actual trading value of the shares.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.