Here's a hypothetical situation: a hedge fund is making money, but one of its exchanges is about to liquidate its position anyway. Bitcoin has fallen, its short position on CME is profitable, and the matching long on Hyperliquid is bleeding cash. The two trades were designed to offset each other, but Hyperliquid can't use profits sitting at CME to cover the losses on its own books. The fund has to find more collateral before the exchange closes the position for it.
Moving money between exchanges takes time, and during a downturn, withdrawals can slow down or stop altogether. The fund could have enough money to cover every position and still lose half its hedge because the profits are sitting in different accounts.
Once that happens, a strategy designed to avoid betting on Bitcoin's direction can suddenly become a very large bet on where the price goes next.
