Crypto Traders Lose $52M in 10-Minute Chip Stock Flash Crash

What Happened Over the Weekend?

Imagine trading stock-linked contracts on a Saturday night while traditional stock exchanges are completely shut down for the weekend.

That is exactly what happened on Saturday when a sudden wave of heavy selling wiped out nearly $52 million in crypto traders' leveraged bets on chip stocks in just 10 minutes.

Because U.S. stock markets were closed, there were no official share prices to serve as a benchmark. Instead, prices were driven purely by crypto traders reacting to one another in real time.

How the 10-Minute Liquidation Cascaded

These trades took place through perpetual futures—special crypto contracts that track equity prices and trade around the clock. This structure allows investors to trade chip stocks even on a Saturday evening.

When traders use leverage (borrowed funds) to amplify their positions, even small price declines can trigger forced liquidations. When losses eat through a trader's margin deposit, the exchange automatically closes out the position, pushing prices lower for the next trader in line.

According to CoinGlass data, approximately $51.6 million in positions tied to semiconductor funds and chip stocks were force-closed between 21:22 and 21:32 UTC.

Traders who were bullish—betting that prices would rise—bore the brunt of the damage, accounting for roughly $38 million of the total liquidations.

Which Assets Were Hit Hardest?

Several chip-linked perpetual contracts experienced significant liquidations during the rapid 10-minute window:

• SOXL Perpetual Contracts: SOXL, a fund designed to triple the daily moves of chip shares, took the biggest hit with about $12.7 million liquidated.
• SanDisk Contracts: Experienced approximately $10.8 million in forced liquidations.
• SK Hynix Contracts: Suffered around $10.8 million in liquidations as well.

Tracing the Spark: Binance to HyperliquidHYPE-1.72% in Seconds

Where did this wave of selling originate? According to an analysis by David Jeong, chief executive of trading firm Tread.fi, the initial spark started on Binance.

Jeong noted that the first large sell orders for SanDisk and Micron were placed on Binance at exactly 21:21:59 UTC.

Less than a second later, the selling pressure spread to Hyperliquid, a crypto platform where Trade XYZ lists stock-tracking perpetual contracts. Within 1.8 seconds, roughly 10 wallet addresses opened bets against six chip-linked contracts.

In that intense first minute, Binance handled about $21.9 million in SanDisk trading volume, compared to $3.1 million on Trade XYZ.

Why Weekend Stock Derivatives Can Experience High Volatility

Memory-chip stocks were already facing headwinds following a tough week, as investors evaluated potential competition from Chinese chipmaker CXMT.

However, trading these contracts when Wall Street is closed introduces distinct trading dynamics. Without live equity market quotes, contracts cannot rely on an external benchmark price.

Under rules on platforms like Trade XYZ, internal platform trading activity establishes reference prices until traditional equity markets reopen on Monday.

When U.S. stock markets reopen, traders will see how closely or widely Saturday's crypto market prices deviated from actual share trading levels.

Past performance of digital assets or equity-linked derivative contracts is not indicative of future results. Derivative trading carries substantial risk due to leverage and price volatility.