Global hedge fund leverage is near multi-year highs. JPMorgan estimates that an end-of-quarter rebalancing could trigger a $165 billion equity sell-off before the end of June, raising the risk of sharp moves in crowded technology trades.
The warnings come from Goldman Sachs and JPMorgan, two of the biggest forces in stock markets. Both point to the same risk, which is that leveraged and concentrated positions can amplify any pullback once mechanical selling begins.
Leverage piles up inside crowded AI trading
Prime brokerage data from Goldman Sachs has tracked the rise in leverage for more than a year. Total hedge fund leverage was about 294% in June 2025, the highest level in five years, Reuters I mentioned.
Net leverage has since risen to its highest levels in four years, said a memo from Goldman trader Lee Copsmith, distributed this month.
Nikolaos Panigirtzoglou, a strategist at JP Morgan, exacerbated concerns. he to caution An extended position in semiconductors increases the risk of a repeat sell-off.
These VaR shocks occur when volatility exceeds the internal limits of the money and forces selling.
His team estimates that semiconductors’ share of global equity value is now more than six times its share of revenue. This is more than double the comparable figure for the Great Seven.
Focus leaves AI shares rise Exposed if feelings turn.
Why is the $165 billion stock sale important?
The close-range trigger is mechanical. JP Morgan Estimates This end-of-quarter rebalancing could drive as much as $165 billion in stock sales by the close of June. Big investors are trimming stocks after a strong rally.
Japan’s $1.9 trillion government pension investment fund It is the largest single seller at about $60 billion.
US pension funds account for another $55 billion. Funds in Norway and Switzerland are adding tens of billions more, while balanced mutual funds have offset nearly $15 billion in purchases.
Selling meets a market already on the brink. Under new Chairman Kevin Warsh, the Fed held interest rates this month and indicated the possibility of raising them this year.
Which The Federal Reserve’s hawkish stance It repriced discounted bets and raised volatility.
What does it mean for Bitcoin
Fragility reaches Bitcoin (BTC). JPMorgan noted that the network’s hashrate has become more price sensitive.
This indicates that more miners are operating close to the break-even point, which increases the fragility of cryptocurrencies.
Bitcoin was trading near $63,620, with a market cap of about $1.28 trillion. It has fallen toward a low of $60,000 in recent weeks.
The token is now trading more Like technology stocks From the safe haven. Weakened as FOMC Earnings and AI Markets shook.
If forced equity selling collides with high leverage and crowded AI bets, volatility could rise across assets through the end of the month.
Whether the market absorbs or amplifies the inflows may set the tone for stocks and cryptocurrencies this week.
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