Hyperliquid traders run CXMT trading to peak volume levels on IPO day

ChangXin Memory Technologies (CXMT) had its long-anticipated IPO on Monday, July 27. The sale coincided with a spike of activity on Hyperliquid, as CXMT drew the attention of whales and retail traders. 

The CXMT IPO was expected to become the biggest offering on the Shanghai stock exchange since 2011. As Cryptopolitan reported, the China AI stock rush was seen as a new opportunity, and was immediately taken over by crypto traders. 

CXMT is already available through TradeXYZ, after the platform bought the rights to the ticker on Hyperliquid for 500 HYPE. 

As of July 27, CXMT had over $45M open interest on HIP-3, with a new peak of daily volumes above $9M after the initial record spike. The day of the IPO coincided with significant selling, as both the perpetual futures contract and the stock were in price discovery mode. 

CXMT surges in Shanghai trading

The chipmaker CXMT became China’s most valuable AI infrastructure firm, after surging between 470% and 530% in its Shanghai debut. The company’s total market cap is estimated at over $483B, making it the most valuable listed company in mainland China. 

The stock market debut also tests the strength of the chipmaker and AI stock narrative. CXMT is a major DRAM producer, a basic component powering user electronics, as well as data centers. 

The IPO proceeds are expected to go toward expanded production and additional research and development. 

Beyond the business model of CXMT, the main driver for the rapid price expansion was the peak demand for shares, far exceeding the IPO offers.

The demand spilled over into on-chain trading, as Hyperliquid offered an entry point to speculating on the early price discovery. On the first day of trading, the HIP-3 market for CXMT reached 1.14% of the volumes on the Shanghai stock exchange, with a spike to $234M in the first hours of post-IPO trading.

Former BTC whale jumps into CXMT

On HIP-3, the price of CXMT ranged from over $8 to $5.99. The price range set by perpetual futures traders was closer to the actual IPO price, compared to the company’s initial target of $1.20 per share. 

After the IPO, HIP-3 held 13 whale positions for CXMT, of which seven were showing bullish confidence with long positions. 

The leading position is still short, with $17.87M in notional value. The leading whale has an unrealized loss of $1.24M after the price rally. 

Another whale, mostly known for BTC positions, fully switched to trading CXMT. The whale still holds a $4.81M position, fluctuating between gains of $300K and small temporary losses. The whales are still waiting for the stock to choose a direction in the initial post-IPO days. 

At this point, it’s unknown if any of the whales have also succeeded in gaining IPO shares directly from the company. In this case, shorting CXMT would be a hedging strategy in case the shares took a nosedive after the initial hype. This scenario would also point to Hyperliqid as a hedging tool, to be used in other upcoming high-profile IPOs.

If you're reading this, you’re already ahead. Stay there with our newsletter.