The cryptocurrency world was thrown into turmoil late last night as the futures market for Plasma’s highly anticipated XPL token experienced a dramatic upheaval on the decentralized exchange Hyperliquid. Within a span of just ten minutes, more than $160 million in open interest was obliterated, leaving traders reeling and the market in a state of disarray. This unexpected event, occurring mere days before the token’s official launch, has left many questioning the volatility and potential manipulation within the market.
A Roller Coaster Ride on Hyperliquid
The trading frenzy kicked off when the price of XPL skyrocketed to $1.80—a meteoric rise of over 200% within two minutes. This sudden surge prompted a wave of liquidations, wiping out over 80% of outstanding positions and slashing open interest from $160 million to a mere $30 million. The entire sell-side of the order book was effectively cleared out, leaving a trail of financial devastation in its wake. As explored in our recent coverage of Bitcoin and Ether’s swift spike, such rapid price movements are not uncommon in the crypto markets and often lead to significant liquidations.
One trader, who attempted to hedge their XPL position with a conservative 1x leverage, lamented their $1.4 million loss, attributing it to what they described as price manipulation. “The market moved against us in ways we hadn’t anticipated,” they said, echoing the sentiments of many caught in the crossfire.
Winners and Losers in the Market Mayhem
Amidst the chaos, some traders managed to capitalize on the situation. A mysterious wallet reportedly went long on tens of millions of dollars in XPL, triggering the cascade of liquidations. This strategic move netted the trader $16 million in profits within minutes, despite still holding a substantial long position worth $10 million.
Meanwhile, a trader known as Techno_Revenant on the social platform X, closed a $20 million long position via auto-deleveraging, raking in nearly $25 million in gains. However, not everyone was so fortunate. Another trader, StableDruid, shared their misfortune on X: “1x no leverage, account destroyed, only hedging 50% XPL allocation.”
Context and Future Implications
This tumultuous event unfolds against the backdrop of Plasma’s imminent XPL token launch—a project that has garnered significant attention. Plasma, a blockchain with a focus on stablecoins, is backed by notable investors such as Founders Fund, Framework Ventures, and Bitfinex. Just last month, Plasma successfully filled a $250 million USDT yield program on Binance in under an hour, underscoring the high level of interest and confidence in the platform. This incident coincides with a period of increased activity on Hyperliquid, as detailed in our report on Hyperliquid’s volume soaring to $3.4B.
Yet, the recent market volatility raises questions about the stability of futures trading on decentralized exchanges. The incident serves as a stark reminder of the risks inherent in cryptocurrency markets, particularly in the lead-up to major token launches. Traders and investors are now left to ponder the potential for further market disruptions as XPL’s official release approaches.
Looking Ahead
As the dust settles, the focus shifts to the future implications of this market event. The XPL token launch is expected to attract even more attention in the coming days, and traders will likely remain on edge, wary of further volatility. The question on everyone’s mind: Can the market stabilize, or will we see more dramatic swings as XPL makes its official debut?
For now, all eyes are on Plasma and Hyperliquid, as the crypto community braces for what promises to be an eventful launch. Only time will tell whether this disruption was a one-off incident or a harbinger of future challenges in the ever-evolving landscape of cryptocurrency trading.
Source
This article is based on: XPL Futures on Hyperliquid See $130M Wiped Out Ahead of the Plasma Token’s Launch
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
