Weekend chip-stock bets on crypto exchanges lose $52 million in 10 minutes

Leveraged crypto contracts tracking chip-company stocks lost roughly $51.6 million in forced liquidations in a single 10-minute window on October 17, while Wall Street was closed for the weekend and no real share price existed to anchor the trades. The cascade exposes a structural gap in the fast-growing market for round-the-clock stock-tracking derivatives: when the underlying market shuts, traders are reacting only to each other.

The sell-off began on Binance at 21:21:59 UTC, when David Jeong, CEO of trading firm Tread.fi, placed large sell orders on SanDisk and Micron-linked contracts. Within a second, the pressure reached Hyperliquid, where about 10 addresses opened positions against six chip-linked contracts within 1.8 seconds. Binance alone handled roughly $21.9 million of SanDisk-related trading in the first minute, compared with $3.1 million on Trade XYZ, a Hyperliquid-based platform that lists stock-tracking contracts.

According to CoinGlass data, total liquidations reached about $51.6 million between 21:22 and 21:32 UTC. Roughly $38 million of that came from traders who had bet on prices going higher. The hardest-hit contracts were SOXL, a fund that triples the daily moves of chip-sector shares, at $12.7 million in liquidations, alongside SanDisk and SK Hynix contracts at $10.8 million each. Micron contracts were also targeted, though no separate loss figure was reported for them. Memory-chip shares had already been under pressure heading into the weekend on concerns about competition from Chinese chipmaker CXMT.

The mechanism behind the losses is forced liquidation: when a leveraged position's losses consume the trader's deposit, the platform automatically closes it, and that closing sale can push the price lower for the next leveraged trader in line — a cascade that feeds on itself. What made this event unusual is that it happened on contracts explicitly designed to track real stock prices, during a 10-hour-plus window when those real prices didn't exist to check against. Trade XYZ's rules allow the platform to set its own reference price until outside stock quotes return, which happens only when U.S. markets reopen.

That reopening, expected Monday, will show how far Saturday's synthetic prices diverged from where the underlying stocks actually trade — the first real test of whether round-the-clock stock-tracking contracts can hold a sane price without a live market to reference. The broader context is a wave of crypto platforms building tokenized and synthetic exposure to traditional equities, marketed on the promise of 24/7 trading. This incident is a concrete illustration of the tradeoff built into that promise: continuous trading means continuous exposure to a market that, for roughly 60 hours every week, has no underlying reference price at all.

As first reported by CoinDesk.