Citadel Unwinds Majority of Risk from Struggling Hedge Fund

Citadel, a major financial institution, has unwound more than 80% of its risk from Situational Awareness, an AI-focused hedge fund that collapsed in July. The collapse resulted in forced selling pressure on Bitcoin miners, which had significant stakes in companies such as Core Scientific and Riot Platforms.

The selling pressure was not necessarily driven by changes in the operating outlook of these mining companies, but rather by the forced liquidation of Situational Awareness' portfolio. Citadel's acquisition of much of this portfolio during the unwind has now seen over 80% of the risk reduced.

This reduction in forced selling pressure could give miner stocks more room to trade on their own fundamentals, such as Bitcoin prices, operating performance, and growing AI infrastructure opportunities.