$165 Billion Stock Selloff Looms as Goldman Flags Rising Leverage
Global hedge fund leverage sits close to multi-year highs. JPMorgan estimates that quarter-end rebalancing might set off a $165 billion inventory selloff earlier than June ends, elevating the chance of sharp strikes in crowded expertise trades.
The warnings come from Goldman Sachs and JPMorgan, two of the largest forces in fairness markets. Both level to the identical threat, that leveraged and concentrated positions might amplify any pullback as soon as mechanical promoting begins.
Leverage Builds Inside a Crowded AI Trade
Goldman Sachs prime brokerage information has tracked leverage rising for over a yr. Gross hedge fund leverage reached about 294% in June 2025, a five-year high, Reuters reported.
A word from Goldman dealer Lee Coppersmith, circulated this month, stated web leverage has since pushed to four-year highs.
JPMorgan strategist Nikolaos Panigirtzoglou sharpened the priority. He warned that stretched positioning in semiconductors is elevating the chance of extra frequent selloffs.
These value-at-risk shocks strike when volatility breaches funds’ inside limits and forces promoting.
His staff calculates that semiconductors’ share of worldwide fairness worth is now greater than six instances their share of income. That is over double the comparable determine for the Magnificent Seven.
The focus leaves the rally in AI stocks uncovered if sentiment turns.
Why the $165 Billion Stock Selloff Matters
The near-term set off is mechanical. JPMorgan estimates that quarter-end rebalancing might drive as much as $165 billion in fairness gross sales as June closes. Big traders are trimming shares after a powerful run.
Japan’s $1.9 trillion Government Pension Investment Fund is the only largest vendor at about $60 billion.
US pension funds account for an additional $55 billion. Norway’s and Switzerland’s funds add tens of billions extra, whereas balanced mutual funds offset roughly $15 billion of shopping for.
The promoting meets a market already on edge. Under new Chair Kevin Warsh, the Federal Reserve held charges this month and signaled a attainable hike this yr.
That hawkish Federal Reserve stance has repriced rate-cut bets and lifted volatility.
What it Means for Bitcoin
The fragility reaches into Bitcoin (BTC). JPMorgan flagged that the community’s hash charge has grown extra delicate to cost.
That indicators extra miners are working close to breakeven, an added pocket of fragility for crypto.
Bitcoin traded close to $63,620, with a market worth of about $1.28 trillion. It has slid towards the low $60,000s in current weeks.
The token now trades extra like a tech stock than a protected haven. It weakened as FOMC and AI earnings rattled markets.
If compelled fairness promoting collides with high leverage and crowded AI bets, cross-asset volatility might climb into month-end.
The market absorbing the flows or amplifies them might set the tone for shares and crypto this week.
The submit $165 Billion Stock Selloff Looms as Goldman Flags Rising Leverage appeared first on BeInCrypto.