A sudden wave of selling wiped out nearly $52 million in leveraged bets on chip stocks in 10 minutes Saturday on crypto exchanges, while the shares themselves remained idle with Wall Street closed for the weekend.
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. Traders betting on higher prices accounted for about $38 million of those liquidations.
The sell-off began on Binance and spread within seconds to Hyperliquid. Large SanDisk and Micron sell orders were placed on Binance at 21:21:59 UTC, followed almost immediately by orders on Hyperliquid, with roughly 10 addresses opening positions against six chip-linked contracts within 1.8 seconds. Binance handled about $21.9 million of SanDisk trading in that first minute, compared to $3.1 million on Hyperliquid.
SOXL, a leveraged fund that triples daily moves in chip shares, sustained the largest losses at about $12.7 million. SanDisk and SK Hynix contracts followed at about $10.8 million each.
These bets operate through perpetual futures contracts that track stock prices and trade around the clock on crypto exchanges, allowing traders to buy and sell chip stocks on weekend nights. When losses exceed a trader's collateral deposit, positions are automatically closed out, and the forced selling can push prices lower for subsequent traders.
With the stock market shut, no real share price was available for these contracts to reference. Prices were driven instead by crypto traders reacting to each other. Trading rules on one platform allowed its trading volume to set reference prices until official stock quotes resume when U.S. markets open Monday.
Memory-chip shares had already experienced volatility during the week as investors evaluated new competition from Chinese chipmaker CXMT.
