On-chain PAXG short squeeze: whale losses flipped to $15.4M monthly gain
A large on-chain trader shorted PAXG with 5× leverage using about $2.8 million in collateral to control roughly $30.3 million notional, then saw losses reverse into gains as prices rebounded, as reported by AInvest. The publication adds that realized profit from this position was approximately $12.7 million, contributing to a total monthly profit of $15.4 million across multiple leveraged trades.
The report also described a contemporaneous opposing long by an early contributor known as “Loracle” at an on-chain derivatives venue, sized near $46.5 million with an average entry around $5,047, which later turned profitable. The article linked the reversal to a broader gold rebound influenced by macro catalysts, including Federal Reserve policy expectations and labor data, and noted the absence of institutional or regulatory commentary in the coverage.
Why this matters for tokenized gold and on-chain leverage
Tokenized gold’s growing activity shows how on-chain leverage can compress reaction time between macro signals and market outcomes, making squeezes more abrupt when liquidity is thin. One industry publication characterized the turnover shift this way:
“Tokenized gold has overtaken major gold ETFs in trading volume in select periods,” said CoinCentral.
Because perpetual swaps settle via periodic funding payments, short squeezes can intensify when funding skews against shorts and maintenance margins tighten. With shallower order books than major ETFs, slippage and forced covering can be pronounced during rapid moves.
Volume leadership does not equal assets under management or lower risk. Market structure and custody differ materially from ETF markets, which can influence volatility, execution quality, and the path of liquidations.
Immediate market impact and confirmed data points
The episode’s immediate effect was rapid deleveraging of concentrated short exposure and visibility into large opposing positions on public venue dashboards. Funding dynamics and open interest typically move with such squeezes, amplifying realized gains and losses as positions are closed or reduced.
Confirmed elements from the original publication include the use of 5× leverage, the approximate $30.3 million notional short exposure, the $12.7 million realized gain from that position, the $15.4 million monthly total, and the presence of a sizable opposing long. There is no independent, regulator-verified dataset publicly cited for this episode.
How to verify claims and assess on-chain trading risks
Verification checklist: addresses, perp OI, funding rates, timestamps
Trace the addresses or trader identifiers cited in coverage and confirm activity on the relevant venue’s public dashboards. Cross-check perpetual open interest, historical funding prints, and time-synced price moves. Align reported entries and exits with block timestamps and venue trade histories to evaluate plausibility and slippage.
Risk notes: liquidity, slippage, partial liquidations, margin stress
Thin liquidity can widen spreads and magnify price impact during forced covering. Slippage increases with notional size and urgency. Partial liquidations can cascade if volatility expands, compounding margin stress and accelerating deleveraging.
FAQ about PAXG short squeeze
How does a short squeeze unfold in tokenized gold markets like PAXG using on-chain leverage?
Rising prices force shorts to cover, lifting demand. Funding turns punitive, margins thin, and liquidation engines close positions, amplifying upward moves in low-depth pairs.
Which platforms were involved (e.g., Hyperliquid) and how do their liquidation and funding mechanisms work?
Hyperliquid hosted activity; according to Hyperliquid, perps use continuous funding between longs and shorts and liquidate when margin falls below maintenance thresholds using mark prices.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
Other Posts
- Amplify 2024: Ohio’s Premier Blockchain Summit
- Polymarket Announces U.S. Beta Relaunch Amid Market Buzz
- China, US Conclude Trade Talks with Focus on Cooperation
- Michael Saylor Denies Bitcoin Sell-Off Amid Large BTC Transfer
- Court Upholds Fed’s Rejection of Custodia Bank’s Request
- Kazakhstan Explores Crypto Reserves Backed by National Funds
- Nordea Bank Introduces Bitcoin ETP Trading for Nordic Customers
- EU Opens Antitrust Probe Into Deutsche Boerse and Nasdaq Derivatives Dealings
- U.S. Treasury Proposes New Tax Relief Regulations
- Radiant Capital Faces $50M Loss in Major Security Breach
- SEGG Media Unveils $300 Million Crypto Reserve Plan
- 21Shares Files S-1 With SEC to Launch Hyperliquid ($HYPE) ETF
- Hong Kong Sentences Influencer for Unlicensed Investment Advice
- Franklin Templeton Signals TradFi and Crypto Integration
- JPMorgan Increases Holdings in BlackRock’s Bitcoin ETF
- Crypto Leaders Address Macro Volatility Amid Market Shifts
- Capital A and Standard Chartered Explore Malaysia Stablecoin Launch
- JPMorgan Chase Launches 24/7 Digital Deposit Token for Clients
- MicroStrategy Retains Spot in Nasdaq 100 Amid Criticism
- CFTC Chairman Selig Plans to Formalize Crypto Regulations
- Amplify 2024: Ohio’s Premier Blockchain Summit
- Polymarket Announces U.S. Beta Relaunch Amid Market Buzz
- China, US Conclude Trade Talks with Focus on Cooperation
- Michael Saylor Denies Bitcoin Sell-Off Amid Large BTC Transfer
- Court Upholds Fed’s Rejection of Custodia Bank’s Request
- Kazakhstan Explores Crypto Reserves Backed by National Funds
- Nordea Bank Introduces Bitcoin ETP Trading for Nordic Customers
- EU Opens Antitrust Probe Into Deutsche Boerse and Nasdaq Derivatives Dealings
- U.S. Treasury Proposes New Tax Relief Regulations
- Radiant Capital Faces $50M Loss in Major Security Breach
- SEGG Media Unveils $300 Million Crypto Reserve Plan
- 21Shares Files S-1 With SEC to Launch Hyperliquid ($HYPE) ETF
- Hong Kong Sentences Influencer for Unlicensed Investment Advice
- Franklin Templeton Signals TradFi and Crypto Integration
- JPMorgan Increases Holdings in BlackRock’s Bitcoin ETF
- Crypto Leaders Address Macro Volatility Amid Market Shifts
- Capital A and Standard Chartered Explore Malaysia Stablecoin Launch
- JPMorgan Chase Launches 24/7 Digital Deposit Token for Clients
- MicroStrategy Retains Spot in Nasdaq 100 Amid Criticism
- CFTC Chairman Selig Plans to Formalize Crypto Regulations
- Amplify 2024: Ohio’s Premier Blockchain Summit
- Polymarket Announces U.S. Beta Relaunch Amid Market Buzz
- China, US Conclude Trade Talks with Focus on Cooperation
- Michael Saylor Denies Bitcoin Sell-Off Amid Large BTC Transfer
- Court Upholds Fed’s Rejection of Custodia Bank’s Request
- Kazakhstan Explores Crypto Reserves Backed by National Funds
- Nordea Bank Introduces Bitcoin ETP Trading for Nordic Customers
- EU Opens Antitrust Probe Into Deutsche Boerse and Nasdaq Derivatives Dealings
- U.S. Treasury Proposes New Tax Relief Regulations
- Radiant Capital Faces $50M Loss in Major Security Breach
- SEGG Media Unveils $300 Million Crypto Reserve Plan
- 21Shares Files S-1 With SEC to Launch Hyperliquid ($HYPE) ETF
- Hong Kong Sentences Influencer for Unlicensed Investment Advice
- Franklin Templeton Signals TradFi and Crypto Integration
- JPMorgan Increases Holdings in BlackRock’s Bitcoin ETF
- Crypto Leaders Address Macro Volatility Amid Market Shifts
- Capital A and Standard Chartered Explore Malaysia Stablecoin Launch
- JPMorgan Chase Launches 24/7 Digital Deposit Token for Clients
- MicroStrategy Retains Spot in Nasdaq 100 Amid Criticism
- CFTC Chairman Selig Plans to Formalize Crypto Regulations
Latest
Press Release
Public Masterpiece Announces PMT Chain, A Layer 1 Built for the Real-World Asset Economy
Cango Inc. Closed the US$10.5 Million Equity Investment and Secured US$65 Million Additional Equity Investments
