Goldman Sachs: Asian equity hedge funds suffer their largest monthly drawdown on record amid a sharp plunge in AI concept stocks.

According to Hyperinsight monitoring, SKHX is currently trading at $921.3, down around 8% intraday, with a 24-hour trading volume of approximately $1.523 billion. Despite the price continuing to decline, capital has not exited; instead, the value of open interest (OI) has risen to about $571 million. Yesterday, SKHX’s OI increased from $443 million to $564 million, a daily rise of roughly $120 million, marking a 27.2% growth. After the price dropped further today, open interest continues to expand, and long position crowding has risen simultaneously. SKHX’s current funding rate is approximately +0.0431% per hour, with a 24-hour cumulative rate of around +0.3948%, a 37.5% sequential increase from the prior 24 hours, further pushing up the cost of long positions. Among whales holding over $1 million in positions, the long-short ratio stands at about 1.24:1, with long positions outpacing short positions by roughly $282 million, meaning both the number and value of positions lean toward longs. However, the closer to top addresses, the weaker the willingness to buy the dip. The overall long-short ratio of all holding addresses is around 4.02:1, but among the top 10 addresses with the largest positions, only 3 are long and 7 are short, bringing the long-short ratio down to 0.43. The top 10 addresses hold a total of about $172 million in positions, accounting for 30.5% of total OI. Currently, SKHX’s dip-buying power is mainly concentrated in long-tail funds.

Goldman Sachs’ trading team noted that US equities have recently experienced sharp momentum pullbacks and position liquidation, with the deleveraging process likely in its late stages, though substantive risk reduction has not yet been completed. Global total leverage remains at the 93rd percentile of the past five years, and events such as geopolitical tensions, Federal Reserve policy, and earnings season may continue to keep market volatility high. Goldman Sachs expects US stocks’ upside in August will be constrained by seasonal fund outflows, insufficient institutional risk appetite, and dealer positive Gamma positions, with the market likely to trade in a range in the short term. If the market continues to decline, systematic strategies like CTAs may ramp up selling pressure; the estimated sell size in a downside scenario over the next week is $24.9 billion, far exceeding the ~$2.3 billion buy size in an upside scenario. Corporate buybacks will serve as the most stable buying support in the near term. Currently, about 31% of S&P 500 constituents are in their buyback open windows, a proportion projected to exceed 90% by mid-August. However, as individual stock-index correlation rises, the extreme risk of synchronized market sell-offs is increasing. Goldman Sachs advises investors to proactively purchase protective positions, including going long on market correlation, buying three-month put options on the Russell 2000 ETF, and allocating short-term option protection for retail-favored stocks. Current hedging costs remain reasonable, making them suitable for hedging further market downside risks.

According to an official announcement, Coinbase will launch Brent crude oil and WTI crude oil perpetual contracts. Trading for the BRENTOIL-PERP and WTIOIL-PERP perpetual contract markets will open at or after 17:00 Beijing Time on August 3.

Citrini stated that initial investors in 25-year-old AI stock prodigy Leopold Aschenbrenner’s AI-themed hedge fund Situational Awareness backed the fund not just for its exposure to AI, but for Aschenbrenner’s judgment on AI’s development trajectory and the fund’s strategy of concentrated long positions in high-beta AI assets. Since its launch in 2024, the fund once posted returns of around 2200%, but recently suffered a sharp pullback amid declines in related stocks. Citrini noted that such AI-devoted investors are unlikely to turn bearish on AI solely because SK Hynix’s stock halved in six weeks. Even if an investor put $100 million into the fund at its inception and lost 90% of their assets in July, their holdings would still be worth roughly $230 million, thanks to the cumulative 2200% return. Citrini expects existing investors may continue buying the dip, and Situational Awareness is likely to secure the new capital it’s seeking. After fundraising is completed, the fund may unwind some short-term hedges and allocate the new capital to what it terms “the best buying opportunity since April 2025”; market makers that sold hedging instruments may also cover their related hedge positions simultaneously. Leopold is not necessarily in trouble; instead, he could potentially push AI stocks to form a temporary bottom through fundraising, hedge unwinding, and repurchases. However, if these AI-devoted investors, who still hold large unrealized gains, refuse to add positions on dips, related stocks may continue to fall sharply.

According to market data from BIT (bit.com), most semiconductor stocks rose during Thursday’s pre-market trading in the US stock market. Lam Research (LRCX) gained 7.65%, Applied Materials (AMAT) rose 2.66%, ASML (ASML) climbed 2.08%, KLA (KLAC) advanced 1.97%, TSMC (TSM) increased 1.05%, and NVIDIA (NVDA) added 0.82%; Arm (ARM) fell 6.47% and Qualcomm (QCOM) dropped 5.50%. Optical communication concept stocks showed mixed performance: Nokia (NOK) rose 3.80%, Astera Labs (ALAB) gained 1.51%, Lumentum (LITE) advanced 0.61%, Corning (GLW) increased 0.60%, while Coherent (COHR) declined 1.16%.

Serenity released a statement saying that 25-year-old AI stock prodigy Leopold Aschenbrenner admitted his AI-themed hedge fund Situational Awareness was not immune to the recent market turmoil. Aschenbrenner described the current sell-off as potentially the best buying opportunity since early 2025. Serenity stated it shares this view and hopes Aschenbrenner can successfully complete fundraising, as many assets have likely fallen beyond reasonable levels amid forced deleveraging. Earlier reports noted that Leopold Aschenbrenner, a 25-year-old rising AI stock prodigy on Wall Street and former OpenAI researcher, founded the AI-themed hedge fund Situational Awareness, which is currently seeking new capital injections. Following a sharp correction in AI-related stocks recently, the fund—renowned for its high-concentration bets on the AI industrial chain—has suffered significant losses and is replenishing capital via communications with investors and potential asset sales.