Author: TokenInsight

Translated by: Shenchao TechFlow

Shenchao Introduction: When the US stock market is closed over the weekend or during night trading, traditional finance (TradFi) perpetual contracts traded 24 hours on crypto exchanges are becoming the first to reflect sudden news in price. Last Sunday, after NVIDIA's board announced the establishment of an independent review committee, the NVDA perpetual contract on OKX platform fell by 4.3% within 4 hours.

In the same week, changes in the US midterm elections combined with the Philadelphia Semiconductor Index's plunge of 12.25% on November 5 led to a significant week-over-week increase of 46.5% in the trading volume of all TradFi perpetual contracts to $321.5 billion, accounting for 25% of the total crypto trading volume. Among these, Binance's share reached 51.4%, and the open interest of SOXL surged 2.9 times.

On Sunday, November 8, the US stock market was closed. Starting at 15:00 Eastern Time, the NVIDIA (NVDA) perpetual contract fell by 4.3% within 4 hours. That day, the NVIDIA board announced it had formed an independent committee to review the reports related to Jensen Huang.

When the night trading opened at 20:00, NVIDIA's stock opening price was 3.7% lower than Friday at 20:00; during the same period (from Friday 20:00 to Sunday 20:00), the perpetual contract fell by 3.6%, with the trends nearly matching. Coupled with the US midterm elections and the chip sell-off wave, the weekly trading volume of TradFi perpetual contracts increased by 46.5%.

Last Week's Three Major Market Dynamics

· Midterm Election: The Democratic Party wins a majority in both the Senate and House of Representatives. A total of 7 Senate seats shifted from the Republican to the Democratic Party (according to statistics from NBC and other media).

· November 5 Chip Stocks Plummet. The Philadelphia Semiconductor Index fell by 12.25% in a single day, marking the worst single-day performance since March 2020.

· Gold strengthens, crude oil weakens. Gold perpetual contracts increased by 4.0% during the week, while crude oil perpetual contracts fell by 11.8%, and the Nikkei 225 perpetual contracts decreased by 7.8%.

Chart: Overview of TradFi perpetual contract markets from November 2 to 8, and key period fluctuations and total trading volume indicators for NVDA and QQQ

Gainers and Losers: Less than One-Quarter of Assets Traded Up

Among the TradFi perpetual contracts on OKX platform with a weekly trading volume exceeding $1 million (excluding leveraged and inverse products), only less than a quarter of the assets ultimately recorded an increase last week.

Chart: Comparison of top gainers (APP, RIOT, MRNA, XIAOMI) and top losers (LITE, AXTI, AAOI, SNDK) among OKX platform's TradFi perpetual contracts last week

· Top Gainer: AppLovin (APP, +67.9%). Its financial report published on November 4 showed a 55% increase in revenue and announced a new $3.2 billion stock buyback plan.

· Riot Platforms (RIOT, +27.0%) announced on November 4 the completion of a 910 MW, 15-year data center leasing agreement.

· Top Loser: Lumentum (LITE, -37.5%). Affected by the overall pullback in the AI optics module sector, the stock plummeted by 18.7% on November 5.

· AXT (-31.8%), Applied Optoelectronics (-30.1%), and SanDisk (SNDK, -30.1%) also faced significant sell-offs.

Main Focus: Jensen Huang's Sunday

Chart: Hourly price movement of OKX platform's NVDA perpetual contract and summary of NVIDIA board statement during weekend trading break from November 6 to 8 Eastern Time

The US stock market is closed over the weekend, but perpetual contracts maintain continuous trading. Here are the specifics of the OKX platform's NVDA perpetual contract movement (Eastern Time):

· From Friday 20:00 to Sunday 15:00: Down 0.6%. The contract price basically fluctuated around 188.

· From Sunday 15:00 to 19:00: Down 4.3%. The price fell from 187.85 to 179.82, with a hourly trading volume of $9.15 million at 15:00, 26 times that of the previous hour.

· Sunday 20:00 when night trading opened: The stock opening was 3.7% lower than Friday 20:00. During the same period, the perpetual contract fell by 3.6%, nearly coinciding between the two, with most of the weekend fluctuations concentrated within these 4 hours on Sunday afternoon.

NVIDIA has clearly confirmed the following three facts:

· On November 8, the board established an independent committee to review reports related to Jensen Huang.

· The board stated that there is currently no reason to believe that there has been a breach of national security or a leak of NVIDIA's confidential information.

· Jensen Huang expressed support for this review in a letter to employees.

Unverified rumors circulating online, such as "espionage activities," are not recognized in this article.

Second Main Line: Midterm Election Week Market Trends

Chart: Daily closing price fluctuation heatmap for TradFi perpetual contracts from November 2 to 6 and distribution of seats in the US Senate and House elections

We compared the price changes of perpetual contracts at the US stock market closing time daily at 16:00 Eastern Time with the previous trading day during the same period:

· On the day the election results were announced (November 4), the market rose, but chip stocks weakened first. The SPY perpetual contract rose by 1.6%, while NVDA fell by 3.1%, and Micron (MU) dropped by 6.9%.

· November 5 saw a broad decline. The QQQ fell by 6.2%, NVDA dropped by 9.2%, SK Hynix decreased by 15.9%, and the triple long chip ETF (SOXL) plummeted by 38.5%.

· Only gold perpetual contracts maintained an increase that day (+0.9%). For the entire week, gold perpetual contracts closed up by 4.0%.

· Most assets saw a rebound on November 6, Friday, with SOXL up 12.1% in a single day.

Regarding the election results, according to NBC's report as of November 4, the current Senate composition is 54 seats for the Democratic Party, 44 for the Republican Party, and 2 undecided; the House of Representatives is controlled by the Democratic Party, with 42 seats still pending determination.

Exchanges and Open Interest: Trading Volume Increased by 46.5%

Chart: Comparison of weekly trading volume of mainstream exchanges' TradFi perpetual contracts, Binance's market share, and changes in SOXL's open interest

· This week, the total trading volume of TradFi perpetual contracts reached $321.5 billion, setting a new record since we started tracking. In terms of exchanges that have consistent data coverage for the last two weeks, trading volume increased from $217.2 billion to $318.1 billion, a growth of 46.5%.

· TradFi perpetual contracts accounted for 25.0% of the total trading volume across all platforms in the crypto market (spot plus derivatives), up from the previous week's 18.5%.

· The busiest trading day of the week was November 5, the day of the chip sell-off, with a single-day trading volume reaching $90.7 billion.

· Binance holds a market trading share of 51.4% (down from 53.4% the previous week, calculated across all sampled exchanges); MEXC trading volume increased by 70%, while OKX grew by 59%.

· SOXL's price fell by another 45% during the week, but the open interest increased to 2.9 times. The open interest data is based on end-of-day data from Binance, Bybit, and OKX on November 1 and 8, estimated by the units of the underlying assets (open interest value divided by the closing price).

It should be noted that the new positions may include hedging positions, so they should not all be interpreted as unilateral bullish bets.

Weekend Gap: Overall Narrowing

Chart: Distribution of premium/discount of 12 US stocks and ETF perpetual contracts relative to the underlying stock when the night trading reopened at 20:00 Eastern Time on Sunday

When the night trading reopened at 20:00 Eastern Time on Sunday:

· Among 12 statistically analyzed stocks, 8 had perpetual contracts priced lower than the corresponding underlying stocks.

· The median gap was 0.32%. The median is calculated by ignoring the sign, sorting the gaps of the 12 groups by magnitude, and taking the average of the middle two values.

· When only comparing 11 stocks (EWY was added this week) that have been consistently included in the statistics for two consecutive weeks, the median gap has narrowed from 0.46% the previous week to 0.35%.

Next Week's Schedule Preview

Chart: Core financial calendar and key focus assets affecting TradFi perpetual contracts from November 16 to 22 Eastern Time

· November 17, Tuesday at 8:30: Release of US October retail sales data, the first consumer data following the midterm elections.

· November 17, Tuesday after market close (16:20): NVIDIA will announce Q3 financial results, which will be the first earnings report since the board initiated the review. Last week, NVDA perpetual contracts cumulatively dropped by 12.7%.

· November 18, Wednesday at 14:00: The minutes of the Federal Reserve's October meeting are expected to be released.

· November 18, Wednesday: According to a letter made public on November 5, three committee chairs of the US House of Representatives have requested Jensen Huang to attend a closed briefing on that day; attendance details have yet to be confirmed.

The election results, chip stock sell-off, and developments related to Jensen Huang all concentrated in the same week, driving TradFi perpetual contract trading volumes to set new records. During the weekend when the US stock market was closed, perpetual contracts were the first to price in the news, and next week NVIDIA's earnings report will be the next test.

TokenInsight's TradFi weekly report updates weekly.