SALP's Leverage Leads to Wild Ride for Crypto Investors

Situational Awareness LP (SALP) was one of the most successful hedge funds to launch in recent years. Founded by Leopold Aschenbrenner, a former OpenAI researcher, the fund grew from $225 million in seed capital to over $20 billion in assets under management within two years.

Aschenbrenner's thesis was that AI infrastructure would be the defining investment opportunity of the decade. SALP concentrated its bets on this idea and achieved returns of over 1,000% since inception. The fund held a significant portion of its assets in Bitcoin miners Riot Platforms and CleanSpark, as well as Bloom Energy and semiconductor-adjacent names like SK Hynix.

However, when AI stocks hit a rough patch in July 2026, SALP's leverage structure meant that losses were amplified. The fund liquidated its entire public equity portfolio to a single buyer, leading to significant selling pressure on the crypto market.