A $24 billion hedge fund founded by former OpenAI researcher Leopold Aschenbrenner has unwound positions after losses on artificial intelligence-linked equities and unsuccessful short positions in software stocks, according to people familiar with the matter. The fund, Situational Awareness, also marketed stakes in private companies, including Anthropic, as it sought liquidity.
Citadel, the firm led by Ken Griffin, bought most of Situational Awareness’ public-equity portfolio after the losses led to asset sales, the people said. Millennium Management also made a bid for the stock portfolio. Situational Awareness was reported to retain private-company holdings, including its Anthropic stake.
The episode places fresh attention on the financing risks behind concentrated AI trades. Public AI-related stocks have drawn heavy capital as companies race to build data centers, chips and large-language-model products, but the selloff described by people familiar with Situational Awareness shows how quickly liquidity can tighten when crowded positions move against a fund. Private-company stakes may hold substantial paper value while remaining much harder to sell quickly than listed shares.
JPMorgan sees a contrarian opening in U.S. stocks
JPMorgan’s global markets intelligence team said its U.S. Tactical Positioning Monitor had issued a buy signal for the S&P 500 after market positioning fell to levels its model considers attractive for a contrarian trade. The bank said its historical sample showed the index rising about 3% on average over the following 20 trading days after comparable shifts.
The JPMorgan note cited lower U.S. Treasury yields, a weaker dollar, stable corporate earnings, easing Middle East tensions and expectations that the Federal Reserve will leave interest rates unchanged as supportive conditions. It also identified crowded semiconductor positioning and the U.S.-Iran situation as risks.
That assessment offers a different reading of the technology selloff from the fund liquidation: positioning can create opportunities for buyers after forced reductions, but the same concentration can amplify declines when funds need cash. The contrast is relevant to digital assets, where sentiment frequently tracks technology shares and changing expectations for U.S. rates.
Coinbase misses estimates as trading activity cools
Coinbase reported second-quarter revenue of $1.22 billion, down 14% from the prior quarter and below the $1.29 billion estimate cited in the supplied material. The company posted a net loss of $359 million, while transaction revenue reached $599 million, compared with a $628 million expectation.
The company said total crypto spot trading volume declined more than 20% quarter over quarter, attributing the fall to lower asset prices and volatility that had dropped to multiyear lows. Coinbase said its trading market share nevertheless reached a record 10.3%, extending its gains for a third consecutive quarter.
The results show the limits of market-share gains during quieter trading periods. Exchanges can capture a larger portion of activity while revenue still declines if overall volumes and volatility contract. Coinbase’s figures also underline why trading businesses remain highly sensitive to price swings, even as they diversify into subscriptions, custody and other services.
Strategy builds cash after bitcoin accounting loss
Strategy reported an $8.2 billion second-quarter loss, compared with a $10 billion profit a year earlier, driven mainly by unrealized accounting losses on its bitcoin holdings. The company said its bitcoin position increased 11% during the quarter to a peak of 846,000 BTC before partial sales. Its most recent disclosure listed holdings of 843,775 BTC.
Strategy said it sold roughly $218 million of bitcoin so far this year to fund preferred-stock dividends and paused bitcoin purchases for five consecutive weeks while building U.S. dollar reserves. At the end of June, it authorized a bitcoin monetization plan of up to $1.25 billion to support reserves or dividend payments.
Phong Le, Strategy’s chief executive, said the company had reduced convertible debt by 18% to $6.7 billion and increased dollar reserves by 12% to $2.4 billion. Andrew Kang, Strategy’s chief financial officer, said dollar reserves stood at about $3.75 billion, enough to cover related payments for roughly two years, and said dividends had been paid on schedule for 18 consecutive months.
The reserve-building plan gives Strategy greater flexibility in a downturn, though it also shows the practical demands created by using bitcoin as a corporate treasury asset. Unrealized changes in the value of a large bitcoin position can produce multibillion-dollar swings in reported earnings, while cash obligations such as debt interest and preferred dividends remain fixed.
DeFi protocols reduce smaller markets
Aave said it will retire 50 low-usage asset reserves across its deployments and wind down operations on Sonic, Scroll, zkSync, Metis, Soneium and Aptos, affecting another 25 reserves. It will also remove 21 expired Pendle PT tokens. Aave said the combined changes cover $98.10 million in supplied assets and $15.60 million in debt.
The decision shifts Aave’s resources away from smaller pools where maintenance and risk management may outweigh demand. Asset reserves allow users to supply or borrow a particular token; closing lightly used markets can reduce protocol complexity and limit exposure to thin liquidity.
Uniswap, meanwhile, introduced a beta tool called Launches in its web app to aggregate token launches gaining traction on the platform. The company said Bankr, Pons and Long selected Uniswap as trading infrastructure, with Launches designed to give new projects a single distribution channel inside the app.
South Korea advances digital-asset enforcement plans
South Korea’s Financial Services Commission said it had completed a draft Digital Asset Framework Act, with a limited number of items remaining under coordination. The regulator said it aims to accelerate legislation as the National Assembly establishes its agenda for the second half of the year.
The commission said lawmakers are considering provisions for AI-agent payments, including customer identification, allocation of payment responsibility, foreign-exchange reporting for cross-border transactions and standards for programmable payments.
Separately, lawmaker Kim Sang-hoon and 15 co-sponsors introduced an amendment that would allow authorities to order payment suspensions from virtual-asset accounts suspected of illegal transfers. The proposal would permit a 30-day freeze, extendable once, and impose penalties of up to 100 million won for noncompliance. It would take effect six months after promulgation.
The proposed rules would give South Korean authorities more direct tools to intervene in suspicious crypto-account flows, extending the compliance burden beyond exchanges and into payment processes connected to digital assets.
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