The price of oil has more than doubled in just two weeks, driving crypto platforms into a speculative frenzy that saw them list leveraged oil derivatives for overnight commodities futures experts willing to risk it all on-chain.
The results were predictable.
Tokenized crude oil perpetuals on Hyperliquid, a platform that earned initial fame from hedge fund-like copytrading and a leaderboard of leveraged degeneracy, have generated multiple, billion-dollar trading days this week.
Oil has suddenly become Hyperliquid’s second-most popular market behind only bitcoin (BTC) itself.
Open interest on Hyperliquid’s CL-USDC, a West Texas Intermediate crude futures-linked contract, exceeded $169 million. Trailing 24-hour volume still exceeded $1.2 billion at time of writing.
When crude spiked more than 30% to nearly $120 a barrel on March 9, oil short-sellers on Hyperliquid, across a 12-hour period, experienced $36.9 million in liquidations relative to just $2.1 million in long liquidations.
The largest single victim held 72,178 CL shorts worth around $7.7 million. The platform liquidated every one of them.
Not that anyone should feel particularly sorry about the loss, given the choice of venue and size in the first place. Indeed, the obviously well-capitalized trader re-opened short positions almost immediately.
Two other million-figure shorts were liquidated near the very top for oil at $120 per barrel. Another trader, rather embarrassingly, started shorting when barrels were in the $70s.
When oil hit $108 on the morning of March 9, they wiped out.
Another trader decided to label their wallet “Oil Bear” on the Hyperliquid leaderboard, turning the dangerous trade into something of an identity. The account has used multiple tens of millions of dollars worth of leverage to gamble on the commodity.
Of course, in highly volatile commodities markets, it can be just as dangerous to bet on the upside as the downside, depending on the moment. On March 11, a $6 million liquidation occurred when oil fell below $87.
Read more: Bitcoin up, Dubai real estate down since Iran war began
Hyperliquid isn’t the only venue offering crypto oil. Aster, a perpetual futures exchange on BNB Chain, launched its own CL-$USDT crude oil perpetuals on March 2.
The exchange, which has earned praise from Binance founder Changpeng Zhao, ran a $10,000 oil trading competition. Binance Wallet also launched its own crude oil perpetual contract, CL-$USDT, on March 7 with 0% maker fees and 1.2x Aster airdrop points.
As individual traders make and lose millions, leveraged positions can suffer liquidations within minutes. Oil perpetuals didn’t exist on these platforms a few weeks ago. Yet when the Iran war created the demand, Hyperliquid, Aster, and Binance Wallet rushed to supply it.
At $95.57 per barrel, crude oil has rallied 66% year-to-date. It was at $120 per barrel as recently as Monday.
