The AI side of the ledger tells a more violent story. A $20 billion leveraged hedge fund, Situational Awareness, gained 439% through June then lost roughly 67% in July, liquidating most of a $16 billion public-equity portfolio that included Broadcom, Intel, and CoreWeave. The fund sold the bulk of its holdings to Ken Griffin's Citadel in a deal valued at more than $10 billion, sparking a relief rally that sent the iShares Semiconductor ETF up 8.5% and lifted former bitcoin miners such as IREN, Sandisk, and CoreWeave more than 20%.
Reuters reported it was unclear whether a formal margin call preceded the sale, but prime brokers were demanding more collateral.
CryptoSlate noted that when Wall Street needs cash fast, Bitcoin's 24/7 liquidity can make it the first asset sold — not the one that caused the loss, but the one still trading. That dynamic links AI margin stress to potential crypto selling pressure even when Bitcoin's own fundamentals are quiet.
Meanwhile, speculative crypto traders have rotated from memecoins into AI and semiconductor contracts on crypto exchanges, chasing momentum in NVIDIA, Micron, SK hynix, and SanDisk derivatives, though analysts warn the surge could end in a sharp decline.