$165 Billion Stock Selloff Looms as Goldman Flags Rising Leverage

Global hedge fund leverage sits near multi-year highs. JPMorgan estimates that quarter-end rebalancing could trigger a $165 billion stock selloff before June ends, raising the risk of sharp moves in crowded technology trades.

The warnings come from Goldman Sachs and JPMorgan, two of the biggest forces in equity markets. Both point to the same risk, that leveraged and concentrated positions could amplify any pullback once mechanical selling begins.

Leverage Builds Inside a Crowded AI Trade

Goldman Sachs prime brokerage data has tracked leverage rising for over a year. Gross hedge fund leverage reached about 294% in June 2025, a five-year high, Reuters reported.

A note from Goldman trader Lee Coppersmith, circulated this month, said net leverage has since pushed to four-year highs.

JPMorgan strategist Nikolaos Panigirtzoglou sharpened the concern. He warned that stretched positioning in semiconductors is raising the risk of more frequent selloffs.

These value-at-risk shocks strike when volatility breaches funds’ internal limits and forces selling.

His team calculates that semiconductors’ share of global equity value is now more than six times their share of revenue. That is over double the comparable figure for the Magnificent Seven.

The concentration leaves the rally in AI stocks exposed if sentiment turns.

Why the $165 Billion Stock Selloff Matters

The near-term trigger is mechanical. JPMorgan estimates that quarter-end rebalancing could drive up to $165 billion in equity sales as June closes. Big investors are trimming stocks after a strong run.

Japan’s $1.9 trillion Government Pension Investment Fund is the single largest seller at about $60 billion.

US pension funds account for another $55 billion. Norway’s and Switzerland’s funds add tens of billions more, while balanced mutual funds offset roughly $15 billion of buying.

The selling meets a market already on edge. Under new Chair Kevin Warsh, the Federal Reserve held rates this month and signaled a possible hike this year.

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 network’s hash rate has grown more sensitive to price.

That signals more miners are operating near breakeven, an added pocket of fragility for crypto.

Bitcoin traded near $63,620, with a market value of about $1.28 trillion. It has slid toward the low $60,000s in recent weeks.

The token now trades more like a tech stock than a safe haven. It weakened as FOMC and AI earnings rattled markets.

If forced equity selling collides with high leverage and crowded AI bets, cross-asset volatility could climb into month-end.

The market absorbing the flows or amplifies them may set the tone for stocks and crypto this week.

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