A synthetic perpetual contract on Hyperliquid, linked to SpaceX's valuation, experienced dramatic volatility on Thursday. The contract plummeted from $2,277 to $1,254 within 30 minutes before recovering to around $2,169. Platform data shows that this drop resulted in the liquidation of 405 users and 1,393 positions, with a nominal loss of approximately $1.51 million.

Rapid decline within 30 minutes

This volatility occurred on the SPACEX-USDH contract. This product is not officially issued by SpaceX, nor is it company equity; rather, it is a synthetic perpetual contract offered by Hyperliquid, allowing traders to bet on changes in the market valuation of this unlisted company.

Because SpaceX remains a private company and there is no official share price available for trading on the public market, these products inherently lack a clear public pricing benchmark. Even after the sharp drop, the settlement price was still $2,132, more than $220 higher than the oracle price of $1,908, indicating that the contract price still had a premium.

Small trading volume amplifies the impact

Looking at the trading volume, this market was already relatively thin. In the past 24 hours, the total trading volume of SPACEX-USDH contracts was only about $4.87 million, with open interest of less than $2.9 million. At this level of depth, a single large sell order could quickly wipe out the buy orders, causing a temporary price imbalance.

Platform data also shows that the median margin for liquidated positions was only $31, reflecting that the participants were mainly retail investors, and many positions used leverage of about 3 times. This thin margin buffer means that liquidations tend to occur more frequently when prices drop rapidly.

Unlisted companies' stocks are more volatile.

This flash crash once again demonstrates that on-chain synthetic products built around the valuations of unlisted companies are more susceptible to price fluctuations driven by liquidity and sentiment. Lacking an official, publicly available price anchor, the market relies more on trading volume to generate quotes, potentially leading to significantly higher short-term volatility compared to mainstream crypto assets.

CoinDesk reports that SpaceX aims to proceed with its IPO in June. Market attention to this expectation has driven trading activity in related contracts, but with insufficient trading depth, prices are more easily amplified by one-sided orders.