With oil prices more than doubling in just two weeks, crypto platforms have gone into a speculative frenzy, listing leveraged oil derivatives for overnight commodity futures experts willing to risk it all on-chain.
The results were as expected.
Tokenized crude oil perpetual trading on HyperLiquid, a platform that first gained fame for its hedge fund-like copy trading and leveraged decadent leaderboards, has generated multiple multi-billion dollar trading days this week.
Oil suddenly became the second most popular market for hyperliquid after Bitcoin (BTC) itself.
Open interest in Hyperliquid’s CL-USDC, a West Texas Intermediate crude oil futures-linked contract, exceeded $169 million. As of this writing, 24-hour trading volume is still over $1.2 billion.
When oil prices soared more than 30% to nearly $120 per barrel on March 9, Hyperliquid’s crude oil short sellers $36.9 million in liquidations occurred in 12 hours compared to just $2.1 million in long-term liquidations.
The biggest victim was in possession of 72,178 pairs of CL shorts worth approximately $7.7 million. The platform liquidated them all.
Given the choice of venue and scale, no one would be particularly disappointed in the loss. In fact, traders who were clearly well-capitalized resumed their short positions almost immediately.
Another $2 million in short sales was liquidated at $120 a barrel of oil, near the all-time high. Another trader, embarrassingly, started shorting when barrels were in the $70 range.
They were wiped out when oil prices hit $108 on the morning of March 9th.
Another trader decided to label his wallet “Oil Bear” on the HyperLiquid leaderboard, turning his risky trades into something like an identity. This account used tens of millions of dollars worth of leverage to gamble against products.
Of course, in volatile commodity markets, betting on the upside can be just as risky as the downside, depending on the moment. On March 11, a $6 million liquidation occurred as oil prices fell below $87.
Read more: Bitcoin rises, Dubai real estate falls since Iran war broke out
Hyper Liquid is not the only company offering virtual currency oil. Aster, the perpetual futures exchange on the BNB chain, has launched its own CL-.$USDT Crude oil perpetual on March 2nd.
The exchange, which has earned praise from Binance founder Changpeng Chao, ran a $10,000 oil trading competition. Binance Wallet has also launched its own crude oil perpetual contract CL-.$USDT0% manufacturer fees and 1.2x Aster airdrop points on March 7th.
Leveraged positions can be liquidated within minutes as individual traders make or lose millions of dollars. A few weeks ago, oil perpetuals did not exist on these platforms. But when the Iran war created demand, HyperLiquid, Aster, and Binance Wallet rushed to supply it.
Oil prices were $95.57 per barrel, up 66% since the beginning of the year. As of Monday, it was $120 a barrel.
