Citadel Clears $2B Bitcoin Miner Overhang, Ken Griffin Says Seller Nearly Finished

Citadel has unwound more than 80% of the risk it absorbed from a $1.99 billion Bitcoin miner portfolio, removing the seller that pressed on mining stocks for roughly three weeks. Traders had spent that window watching miner names grind lower under pressure that appeared indifferent to valuation. In a letter to clients on Friday, Ken Griffin said that seller is nearly finished, and the firm has already distributed most of the book. The unwind traces back to July 30, when Citadel accepted about $10 billion of stock from Leopold Aschenbrenner's Situational Awareness portfolio after that fund, a four-times-levered AI vehicle, lost 67% in a single month. The 13F, the quarterly holdings report that large investors must file with the SEC, covered the period through June 30 and was lodged on August 14; it listed a $20.24 billion portfolio across just 26 positions, and Bitcoin miners made up $1.99 billion of it. Core Scientific was the largest miner holding at $666 million; Riot Platforms held $468 million, IREN $433 million and CleanSpark $179 million. A fresh $152 million stake sat in Keel Infrastructure, the company Bitfarms became after its April rebrand. The miner books had grown fast, climbing 79% in one quarter while shrinking to under 10% of the portfolio; Riot alone rose 229%. Citadel pushed through nearly 100 block trades worth more than $4 billion to distribute the risk, including the largest intraday blocks of the year in ten separate names, and three Citadel funds gained sharply after the purchase. In the same letter, Griffin described the ability to distribute that risk as central to the investment thesis. A large seller with no reason to care about the price has therefore been replaced by buyers who made the same bet at a lower price. For holders of public mining stocks, the overhang that had functioned like a one-sided bear market for three weeks has mostly lifted.

The episode is a case study in how an artificial-intelligence trade became Bitcoin mining's problem. Situational Awareness, run by former OpenAI researcher Aschenbrenner, had returned 439% in the first half of 2026 before July erased those gains. Aschenbrenner was not buying Bitcoin directly; he was buying megawatts, because public miners already controlled grid capacity and power contracts, making their shares a proxy for AI data-center expansion. The fund bought miners fast and memory chips even faster, according to the 13F's quarter-over-quarter changes. The fund's March positioning showed $8.5 billion of put options against Nvidia, Oracle, Broadcom and other AI names; those puts were the hedge. By June 30, however, the hedges had almost completely disappeared, replaced by $12.5 billion of outright long bets. Sandisk and Micron alone accounted for 55.6% of the entire book, a concentration that left the portfolio exposed to a single semiconductor trade. The portfolio had therefore stopped protecting itself and doubled down on the memory-chip cycle at four times leverage. When chip stocks slid in July, nothing cushioned the fall, and miner exposure — which had grown in dollar terms while shrinking to less than 10% of the portfolio — became collateral damage in a semiconductor deleveraging. The SEC filing makes that sequence visible: the same document that shows $1.99 billion of ASIC mining stocks also shows a book overwhelmingly concentrated in memory names. Citadel's three-week cleanup, executed through block trades rather than exchange dumps, was the mechanism that broke the logjam. Now that the forced seller is mostly gone, the sector can return to its own numbers, from hosting agreements such as Riot's lease with Anthropic to heavy quarterly mining losses. The question left open is whether the buyers who absorbed Citadel's blocks share Aschenbrenner's original thesis that hashrate is a claim on power — at a lower price.

Meanwhile, the AI-infrastructure transition among mining firms is producing its first hard numbers. Ionic Digital, a miner pivoting toward power-site leasing, reported that 90% of its second-quarter revenue — $43.8 million of $48.6 million total — came from leasing its Ward County facility to AI infrastructure operator Nscale, while mining contributed just $4.8 million. The shift has not insulated earnings from Bitcoin: a $28.2 million non-cash fair-value loss on its 2,882 BTC holdings, carried at $168.7 million as of June 30, drove a GAAP net loss of $35.3 million. Adjusted EBITDA reached $37.6 million after adding back the mark-to-market charge, taxes and depreciation. Notably, contracted cash rent only began in August, with payments stepping up from $3.25 million monthly through 2026, so future quarters will measure the actual cash conversion of this pivot.

Meanwhile, bitcoin's broader market surge has reshaped the derivatives landscape ahead of Friday's options expiry. The token climbed from roughly $62,653 to a seven-day high of $79,461 before settling near $77,000, while U.S. spot bitcoin ETFs recorded net inflows exceeding $1 billion this week — the fastest pace since January. Open interest on CME and Binance combined reached $20.37 billion, with CME's jumping 11.34% in 24 hours. Options positioning tilted bullish, as call options represented 59.53% of total open interest, though sizable put positions at $60,000 and $66,000 strike prices indicated traders are hedging downside risk. Bond market pressure persists, with the 30-year Treasury yield at 5.273% despite Treasury Secretary Scott Bessent's plan to expand buybacks of long-dated notes. The upcoming Jackson Hole symposium and the August 22 options expiry now serve as key tests for whether the rally can hold without further leverage accumulation.

Coinkite has released a security overhaul for its Coldcard hardware wallets after a seed-generation flaw led to roughly $130 million in Bitcoin thefts. The updated firmware, version 5.6.1 for Mk4 and Mk5 and 1.5.1Q for Q, requires users to add their own randomness—at least 65 key presses, 50 dice rolls, or 128 coin flips—when generating a new wallet seed, combining that input with the device's own entropy. The three-week review, which included outside security researchers and AI models, also fixed issues involving transaction signing, USB data handling, firmware validation, Delta Mode, and backups. Users who generated seeds on affected versions between 2021 and July 2026 must create a new seed with the updated firmware and move their Bitcoin, as the flaw reduced entropy from 128 bits to roughly 40 bits on some devices.

The Treasury's August 19 move to at least double its long-dated buyback operations to $4 billion per issue added $14 billion in liquidity support, briefly sending Bitcoin above $77,000 before the relief faded. Roughly $3.5 billion in leveraged crypto positions were liquidated in the 24-hour surge, the seventh-largest liquidation event on record, but by August 20 the 30-year yield had retraced half its drop to 5.24%, and Bitcoin slipped back to the high-$60,000s after Fed minutes reintroduced rate-hike risk. Critics called the surprise buyback a "shot from the hip" that does not change deficits, while Evercore ISI credited Bessent's tactical timing but questioned durability given maturing debt.

(as of 06:55 UTC) Bitcoin trades at $77,458.77, up 2.55% in 24 hours, with the composite engine placing STRONG support at $73,674.39 (score 70) from HVN, Fibo 0.618, Flip R→S, and LVN, and a secondary STRONG level at $76,557.50 (score 65) from Fibo 0.786, Pivot Point, and MACD Cross, while STRONG resistance sits at $78,568.57 (score 74) from Flip S→R, HVN, LVN, and Fibo 0.886. RSI at 81.78 signals overbought conditions, yet MACD remains bullish. Derivatives show funding at 0.0058%, open interest at $14.61 billion, and a long/short ratio of 1.13 (53.0% long), while the Fear & Greed Index reads 71 (Greed). The immediate bias is to challenge $78,568.57; a break above opens the path toward $80,845 and then $83,428, while losing $76,557 would expose $73,674 and, below that, $69,289.