According to a Bloomberg report on July 19th, a surprise technological breakthrough by the Chinese AI startup Dark Side of the Moon triggered a sharp decline in global AI and semiconductor stocks on Friday, reigniting speculation about a "DeepSeek moment" in 2025. The benchmark semiconductor index has fallen approximately 20% from its June high, entering a bear market; the SOXL 3x leveraged semiconductor ETF has fallen more than 50% over the same period.

This sell-off demonstrates that as advancements in AI technology rapidly alter market perceptions of winners and losers, leveraged ETFs, options, single-stock funds, and crypto-related products may be liquidated simultaneously. Bloomberg industry research data shows that leveraged ETFs account for approximately 13% of US ETF trading volume, but only 1.2% of industry assets. Even after accounting for embedded leverage, their proportion of the US stock market is still less than 1%.

While these products are limited in overall size, their holdings are concentrated in AI chips, highly volatile stocks, and newly listed companies. When leverage, concentration, and volatility rise simultaneously, the fund's daily rebalancing may turn it into an active buying and selling force, further amplifying existing market trends.

The South Korean market recently provides a clear example. Local retail investors heavily bought leveraged products linked to Samsung Electronics and SK Hynix, and as market sentiment weakened, related funds were forced to sell off SK Hynix holdings estimated at billions of dollars.

According to BlockBeats, on July 19th, Coinglass data indicated that if Bitcoin breaks through $66,000, the cumulative short-selling intensity on major CEXs will reach $523 million.

Conversely, if Bitcoin falls below $63,000, the cumulative liquidation intensity of long positions on major CEXs will reach $658 million.

BlockBeats Note: The liquidation chart does not show the exact number of contracts pending liquidation, or the exact value of contracts being liquidated. The bars on the liquidation chart actually represent the importance, or strength, of each liquidation cluster relative to its neighboring liquidation clusters.

Therefore, the liquidation chart shows the extent to which the price of an asset is affected when it reaches a certain level. Higher "liquidation bars" indicate that the price will react more strongly due to liquidity surges once it reaches that level.

According to a Bloomberg report on July 19th, Circle's stock price has fallen more than 75% from its post-IPO high last year. Mizuho Securities' US analyst Dan Dolev downgraded Circle's rating from "neutral" to "underperform" this week, giving it the lowest target price on Wall Street at $50, representing approximately 18% downside from Thursday's closing price and significantly lower than the average analyst target price of $123 compiled by Bloomberg.

Dolev believes Circle faces increased competition from stablecoins. More than 100 fintech companies, payment networks, crypto companies, and banks, including Visa, Stripe, Coinbase, and BlackRock, are supporting Open Standard, which will issue OUSD. Circle's stock closed down 7.7% on Thursday, the same day Visa launched its stablecoin issuance, transfer, and management platform for financial institutions.

Circle primarily generates revenue through returns on its USDC reserve assets, while newer stablecoins like OUSD plan to share reserve returns with partners and charge lower management fees. Dolev believes this business model could attract partners away from Circle and exacerbate pricing and profit margin pressures.

Dolev projects Circle's adjusted EBITDA for 2027 to be $699 million, below the market consensus of $907 million. He also noted that Circle's USDC distribution agreement with Coinbase will be renegotiated in August, with Coinbase potentially leveraging the competitive pressure from OUSD to secure a higher revenue share.