Weekend Sell-Off Triggers $13M Liquidations in EdgeX Nasdaq-Linked Perpetual Contract
Over the weekend of December 14-15, 2025, a sharp sell-off in EdgeX’s Nasdaq-linked perpetual contract resulted in approximately $13 million in liquidations, primarily affecting long positions. This event highlights persistent volatility and liquidity challenges inherent in crypto derivatives that track traditional equity indices outside of regular market hours.
What happened
EdgeX offers a crypto derivative product—the Nasdaq-linked perpetual contract—that tracks the Nasdaq 100 index price and allows continuous 24/7 trading, including weekends and US market off-hours. During the weekend in question, the contract experienced a significant price move that triggered around $13 million in liquidations, mostly among traders holding long positions. This liquidation event occurred despite the underlying Nasdaq 100 index being closed as US equity markets do not operate during weekends.
Because the Nasdaq 100 index itself does not trade on weekends, EdgeX’s pricing mechanism relies on a hybrid model combining index futures prices and synthetic pricing algorithms to estimate the index value during these periods. According to market data from CryptoCompare, the liquidation event coincided with a notable divergence between the EdgeX perp price and the official Nasdaq 100 futures prices, which were either closed or thinly traded over the weekend.
Similar volatility and liquidity issues have been reported on other platforms offering Nasdaq 100-linked perpetual futures, such as Binance, where off-hours trading also exposes traders to price discrepancies and heightened risk. Industry analyses suggest that the 24/7 trading model for these equity-index linked crypto derivatives can create systemic vulnerabilities, as low liquidity and reliance on synthetic pricing during off-hours amplify price swings and liquidation events.
Why this matters
This episode underscores structural challenges in the emerging class of hybrid financial instruments that blend traditional equity derivatives with crypto market features. Unlike conventional equity derivatives, which are bound by exchange hours and regulated market structures, these perpetual contracts operate continuously, exposing traders to price risks disconnected from underlying market liquidity.
The reliance on synthetic pricing models and futures markets that are thinly traded or inactive during weekends raises questions about price accuracy and market integrity. When price feeds become detached from the underlying index, the risk of forced liquidations increases, potentially triggering cascades of selling that exacerbate volatility. This dynamic threatens market stability and investor protection, particularly for retail participants who may be less equipped to manage such risks.
Moreover, these hybrid products operate in a regulatory grey zone, lacking the comprehensive oversight and investor safeguards typical of traditional equity derivatives markets. The absence of clear regulatory frameworks complicates risk management and heightens systemic vulnerabilities within the broader crypto derivatives ecosystem.
What remains unclear
Key details about EdgeX’s internal risk controls and pricing safeguards remain undisclosed. Specifically, how EdgeX adjusts its pricing mechanism during extended market closures and what protocols are in place to prevent price manipulation or extreme dislocations is not publicly documented. Similarly, the design and calibration of liquidation algorithms during periods of off-hours volatility spikes are not transparent, leaving open questions about whether these systems are structured to mitigate cascading liquidations.
There is also limited information on the regulatory environment governing these hybrid crypto-equity derivatives. It is unclear how current frameworks apply or whether new regulations are anticipated to address the unique risks posed by these products. Furthermore, data distinguishing the impact of such liquidation events on retail versus institutional investors is not available, constraining a full assessment of market participant vulnerabilities.
What to watch next
- Disclosures or updates from EdgeX regarding their pricing methodology and risk management protocols during off-hours trading.
- Regulatory announcements or consultations addressing the oversight of crypto derivatives linked to traditional equity indices.
- Market developments around improving liquidity in Nasdaq 100 futures markets during off-hours, which could reduce pricing discrepancies.
- Technical analyses or independent research shedding light on liquidation engine behavior in crypto perpetual contracts under volatile conditions.
- Comparative studies on similar products offered by other platforms to assess systemic risks and best practices for investor protection.
This liquidation event highlights ongoing tensions between the promise of 24/7 crypto derivatives trading and the realities of underlying market liquidity and regulatory gaps. Without greater transparency and robust safeguards, these hybrid products may continue to pose systemic risks that challenge market stability and investor confidence.
Source: https://www.coindesk.com/markets/2025/12/15/weekend-sell-off-hits-edgex-s-nasdaq-linked-perp-as-usd13m-in-longs-liquidated. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.