Citadel posted its best month in years in July after buying roughly $16 billion of public equities from the collapsed Situational Awareness fund at a significant discount. The flagship Wellington fund returned 5.9%, its best month since 2022, while the tactical and equities funds each posted record months. The purchase also handed Citadel stakes in Bitcoin mining companies that Situational Awareness held as part of an AI-infrastructure bet.
Wellington fund posts its best month since 2022
Citadel's flagship multistrategy Wellington fund, the firm's largest, returned 5.9% in July, marking its best monthly performance since 2022 and pushing its 2026 gain to 12%, according to a person familiar with the firm's performance. The tactical trading fund gained 11.1% in July and is up 27% for the year. The equities fund advanced 14.2% last month, bringing its 2026 return to 27%, and both funds posted their best month ever.
A $16 billion purchase at a discount
The rally followed Citadel's acquisition of the bulk of Situational Awareness's public stock portfolio in late July, after the smaller fund's rapid unraveling forced it to unwind its book. Citadel bought roughly $16 billion worth of public equities at a discount exceeding 10% to market value, with the deal closing late on July 30 and into July 31. Several of Situational Awareness's prime brokers worked to reduce positions in an orderly fashion as the fund sought to meet margin calls, and Citadel emerged as a significant buyer of the forced liquidation.
From $100 million to a forced sale
Leopold Aschenbrenner, a former OpenAI researcher, launched Situational Awareness in 2024 with $100 million in initial capital, betting aggressively on AI infrastructure stocks while shorting software names. Its assets under management ballooned to $45 billion by early July 2026.
But holdings like SK Hynix declined sharply while the fund's software shorts moved against it, a reversal that left the fund bleeding on both sides of its book and triggered the leverage unwind. Client-capital-funded positions reportedly remained intact.
Bitcoin miners caught in the fire sale
Situational Awareness's holdings included stakes in Bitcoin mining companies such as Core Scientific, IREN, and Riot Platforms, reflecting a thesis that AI and Bitcoin mining infrastructure are converging. Some of the acquired stocks, including Nebius and Micron, rebounded in the final days of July with many traders treating the rescue as a clearing event. Citadel managed about $71 billion in assets as of July 1. Citadel declined to comment.
If Citadel trims or exits its newly acquired mining stakes in the coming weeks, selling pressure on those stocks could weigh on the sector.
Sources: CNBC, Crypto Briefing
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