Former OpenAI employee Leopold Aschenbrenner's fund, Situational Awareness LP, was forced to sell most of its secondary market assets at a discount to Citadel (a large US hedge fund) near its lowest point yesterday due to high leverage.
Situational Awareness is the title of a 165-page paper he wrote, which generated significant buzz in the AI industry, and his fund is named after it.
The paper essentially discussed how AI development will drive the development of the entire AI industry chain, and his investment logic focuses on the upstream and downstream of this chain.
His fund's assets under management (AUM) grew from over $200 million to a peak of $45 billion since its inception, attracting considerable attention.
Unsurprisingly, the rapid expansion of Situational Awareness LP's positions was due to leverage. This amplified returns during upward trends but also led to liquidation risks during downturns.
It's important to note that "Context-Aware LP" sold its secondary assets, but not its primary assets (unlisted companies, such as OpenAI shares).
This example is quite similar to FTX's situation in 2022. The main reason for FTX's problems was that its liquid assets (mostly FTT, its platform token) couldn't cover its liabilities (the money users had deposited).
The outcomes differed – while Context-Aware sold at a loss at the bottom, it at least avoided liquidation, and its primary market assets remained valuable. FTX, however, ultimately collapsed.
What's the difference?
Citadel recently touted interest rate hikes and then bought Context-Aware's shares at the bottom, leading many to believe it was a scheme to profit. (Figure 2 hints at this view.) Regardless, Citadel's willingness to take over these assets at the bottom at least prevented a worse scenario (forced liquidation leading to a sell-off).
When FTX collapsed, although it sought many potential buyers, no one was willing to take them over. In particular, Binance not only refused to take over, but CZ also posted a message stating that FTX's financial situation was extremely poor, exacerbating FTX's liquidity crisis.
FTX's collapse led to the ultimate crash of 2022 (Bitcoin fell from 21,000 to 15,500, and SOL fell to 8 yuan), followed by two months of bear market consolidation at the bottom.
From this perspective, although both are profit-driven, perhaps the US stock market has a stronger spirit of "helping each other out" than the cryptocurrency market. This may be related to the long-term win-win nature of the US stock market versus the essentially speculative nature of the cryptocurrency market.
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社会主义接班人
06-09 12:49
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🚨A Turning Point in the Bull Market? ? ? A Bull Market Trap!!!
🇺🇸 SBF applied for a pardon from Trump, and FTT surged over 60%.
My assessment: Application ≠ Approval.
📌 Extremely low success rate.
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吴说区块链
06-09 11:16
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Following FTX founder Sam Bankman-Fried's (SBF) submission of a presidential pardon request to the U.S. Department of Justice's Office of Pardons, FTT shares surged over 50% within 24 hours, with trading volume increasing by over 600% to more than $16 million. Reports indicate that FTT lacks a clear practical use after FTX's bankruptcy, and this surge largely reflects speculative trading in anticipation of SBF's pardon; even if the pardon is granted, it will not automatically restore FTX, restore FTT's original purpose, or change the structure of creditor claims. (CryptoSlate)
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老陌
06-09 09:51
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Hey guys, this is incredible! Does anyone remember FTX? I had tens of thousands of USDT in there back then.
🇺🇸 SBF has officially applied for a Trump pardon.
$FTT surged 62% on the news.
A guy in jail just handed over a note, and the coin jumped 62%.
📌 That 62% increase wasn't a bet on FTX's revival, but on the fantasy that "someone wants it back."
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比特币总裁
06-09 09:36
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Yesterday, FTT surged 60%, mainly due to the SBF family applying for a pardon from Trump. The SBF family should be able to get a pardon this year; as long as the money is right, Trump is quite shrewd with social niceties.
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先知
06-08 23:37
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It's rumored that Sam Bankman-Fried (SBF) has formally applied for a pardon from Trump.
The veracity of this news is unknown, but $FTT surged in response.
Crypto is so boring, who can save the crypto world? @bcgame
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CryptoPotato Official
06-08 22:31
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Market Update: $FTT stock price suddenly surged over 50%, reaching its highest price in nearly a month.
This surge stemmed from an interview in which former FTX CEO @sbf_ftx revealed he was seeking a presidential pardon while insisting he had never misappropriated customer funds.
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Eunice D Wong 🦄
05-15 00:47
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Key Moments That Changed Cryptocurrency History
1. Bitcoin's First Public Tweet
Bitcoin made its first public appearance on social media.
This tweet, posted a few days after the genesis block, was from a user named "cypherpunk" who received the first Bitcoin transaction from Satoshi Nakamoto.
2. First Major Corporate to Establish a Bitcoin Vault
MicroStrategy (Strategy Inc.) became the first publicly traded company to use Bitcoin as its primary treasury asset, replacing cash.
This sparked a wave of corporate treasury adoption of Bitcoin, which other companies subsequently followed suit.
3. Major Tech Companies Accept Bitcoin Payments
Tesla purchased $1.5 billion worth of Bitcoin, and on March 24, 2021, Elon Musk tweeted that he would accept Bitcoin as a payment method. This marked the first time a Fortune 500 company had accepted Bitcoin as a payment method.
However, on May 12, 2021, Tesla suspended Bitcoin payments due to concerns about the energy consumption of mining.
Bitcoin prices plummeted within hours, as the ESG (Environmental, Social, and Governance) debate surrounding cryptocurrencies continues to influence the cryptocurrency space.
4. El Salvador Becomes the First Country to Legalize Bitcoin
On June 9, 2021, El Salvador officially passed the Bitcoin Law, demonstrating that the state can incorporate cryptocurrencies into its monetary policy.
5. Ethereum Switches from Proof-of-Work (PoW) to Proof-of-Stake (PoS) Mechanism
Ethereum initially used a PoW mechanism similar to Bitcoin, which consumed a significant amount of electricity.
After switching to PoS, energy consumption decreased by almost 99.95% overnight. This upgrade eliminated Ethereum's environmental risks, making it more readily accepted by traditional financial institutions, universities, and businesses.
This switch also solidified Ethereum's position in DeFi (Decentralized Finance), NFTs (Non-Monetary Trusts), and smart contracts.
6. FTX Crash
On November 2, 2022, CoinDesk released a report disclosing that Alameda Research, a sister company of FTX, held over $6 billion worth of FTT tokens on its balance sheet, raising serious concerns about its solvency and liquidity.
Sam Bankman-Fried and his team were allegedly abusing customer funds behind the scenes for years, potentially creating a funding gap of over $8 billion.
Days after CoinDesk's report, Changpeng Zhao (CZ) announced that Binance would liquidate its remaining FTT holdings (worth approximately $580 million at the time).
CZ's tweet triggered a massive panic withdrawal.
> The price of FTT plummeted by approximately 80% within 48 hours.
> Users flocked to FTX to withdraw their funds.
> Within just 72 hours, $6 billion was withdrawn from FTX.
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狙神Trader
02-25 16:14
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Aside from Bitcoin, don't have faith in any other cryptocurrency!
Those who have faith in EOS,
those who have faith in FTT, Luna,
are now buried under a mountain of weeds.
Every cycle has its own narrative,
and its own "god-like" coins,
but that doesn't mean these coins can transcend cycles.
If you're looking to get rich quick, then go for Ponzi schemes and futures trading—a near-certain death.
If you're looking for stable profits, then go for Bitcoin—eat well, sleep soundly.
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GiGi 發財豬
02-06 18:06
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What happened during the "dead winter" of 2022 for crypto?
May: LUNA algorithmic stablecoin crashes
June: Celsius freezes withdrawals, shattering the high-interest myth
July: Voyager & Celsius go bankrupt, 3AC hedge fund liquidates, owing billions in debt
November: FTX crashes! @CoinDesk reveals Alameda holding large amounts of FTT → CZ clears out holdings on Twitter → 6 billion+ in withdrawals in 72 hours → Binance acquisition fails → FTX goes bankrupt, 8 billion+ in user funds trapped, SBF imprisoned
December+: BlockFi follows suit with bankruptcy, BTC drops to a low of 15.5k, NFTs go to zero
How will this crypto bull market, which started with Trump, end with the crash he caused?