Goldman Sachs and JPMorgan warn: a $165 billion selling avalanche threatens the market and cryptocurrencies
The world's largest hedge funds have accumulated a record volume of borrowed capital in recent years. Analysts at leading investment banks warn that a massive portfolio reshuffling at the end of the quarter could trigger a sell-off of securities worth up to $165 billion. This situation significantly increases the risks of sharp fluctuations in the value of overheated tech giants.
The unprecedented level of leverage, combined with a high concentration of investment bets, will inevitably amplify the market decline when mechanical selling is triggered. We are witnessing a classic scenario where excessive investor confidence turns into systemic vulnerability.
Record Leverage: A Ticking Time Bomb
The total leverage of hedge funds in June 2025 reached approximately 294% — the highest level in the last five years. Net leverage rose to its highest levels in four years. JPMorgan strategist Nikolaos Panigirtzoglou noted that bets on the semiconductor sector are so overheated that the likelihood of new waves of selling has increased significantly.
Particularly alarming is the situation in the artificial intelligence sector. The ratio of stock value to revenue share in semiconductor companies exceeds 6 times, while for the "Magnificent Seven" tech giants it is only 3 times. Such a high concentration of capital makes the AI sector extremely vulnerable. Any local deterioration in sentiment among major players could trigger a cascading correction.
Quarterly Rebalancing: A Trigger for a Sell-Off
The main trigger now is the mechanics of quarterly rebalancing. According to JPMorgan calculations, in the final days of June, institutional players could sell up to $165 billion in stocks to adjust portfolios after a successful rally. Japan's GPIF pension fund, with $1.9 trillion in assets, is the largest seller, accounting for about $60 billion. Pension funds in the U.S. are expected to offload another $55 billion. Norwegian and Swiss entities will add several tens of billions to this sum.
The Federal Reserve's firm stance, maintaining current monetary policy parameters, quickly cooled investor hopes for an imminent easing of conditions. Fed Governor Kevin Warsh hinted at the possibility of a new round of tightening before the end of the year, triggering an additional wave of turbulence on exchanges.
Bitcoin Under Pressure: From Safe Haven to Risky Asset
The overall vulnerability of the traditional financial sector has naturally affected the flagship crypto asset as well. Analysts note that the blockchain's hashrate has become much more dependent on the market price of the coin. Many miners are now operating on the edge of equipment profitability, which amplifies the overall instability of the digital segment.
Bitcoin is holding positions around $64,100 with a market capitalization of about $1.29 trillion. In recent weeks, the coin has repeatedly corrected toward the lower boundary of the psychological range of $60,000. The cryptocurrency is now behaving like a highly volatile tech stock, having completely lost its safe-haven properties.
Expert Opinion: The scenario where a wave of institutional sell-offs coincides with a crisis of excessive leverage looks increasingly realistic. If this happens, the financial storm will intensify significantly by the end of the calendar month. The ability of buyers to absorb such massive volumes of capital will determine the further direction of both stocks and cryptocurrencies in the coming weeks. Investors should prepare for heightened volatility and reassess their risk management strategies.