Justin Drake’s warning that the crypto industry should prepare for a potential AI-driven break of wallet cryptography drew mixed reactions as bitcoin fell below $83,000.
Bitcoin extended its decline during Asian trading, briefly falling to around $82,300 before recovering to approximately $82,800. That left BTC about 4% below Tuesday’s high near $86,600. The CoinDesk 100 index was down almost 2% over the previous 24 hours.
Ethereum Foundation researcher Justin Drake urged the crypto industry to start preparing for what he described as “bunker mode” in a post on X that has received nearly 4 million views.
His proposal involves gradually moving funds to fresh addresses whose public keys have never been exposed. Drake argued that rapid advances in AI-assisted mathematics make it prudent to prepare for a potential break of the elliptic-curve signatures protecting bitcoin and ether wallets within “months not years.” He cited 722 mathematical results released by OpenAI this week as part of his argument.
The warning did not receive universal support. Ethereum co-founder Vitalik Buterin said the possibility of AI accelerating mathematical breakthroughs deserves serious attention but advised crypto holders not to rush into moving their assets.
Samson Mow, CEO of bitcoin technology company Jan3, took a more dismissive position, telling followers there was no reason to panic “because an Ethereum researcher is saying silly things.”
Bond Yields Continue to Rise
Pressure from the Treasury market remained elevated. The 30-year Treasury yield increased 4 basis points to 5.71%, while the 10-year yield climbed to 5.32%, according to CNBC.
The moves came ahead of a $22 billion auction of 30-year Treasury bonds scheduled for later Thursday.
Minutes from the Federal Reserve’s September meeting, released Wednesday, showed that all 19 officials supported the rate increase delivered last month. Most officials also viewed another hike by the end of the year as potentially appropriate.
The next major inflation reading arrives with the September consumer price index on Oct. 14, which will be the final CPI report before the Fed’s Oct. 28 policy decision.
Derivatives Positioning
Sellers retain an advantage as liquidations decline: The 24-hour taker long/short ratio stood at 48% long versus 52% short, little changed from the more than 52% short share recorded the previous day. Crypto futures open interest fell 1% to $150 billion, while trading volume was largely unchanged at $187 billion. Liquidations declined to $400 million from $548 million a day earlier. Sellers remain dominant, but forced selling has eased.
Major tokens show deleveraging rather than aggressive new shorts: Notional open interest, representing the dollar value of active futures positions, has declined in BTC, ETH, HYPE, XRP and DOGE by amounts equal to or greater than their spot-price declines. This suggests traders are not broadly adding new bearish positions as prices fall and, in some cases, are closing existing positions. The move therefore appears more like risk reduction than a fresh build-up of short exposure.
NEAR attracts fresh capital: NEAR gained 4% over 24 hours, while its notional open interest climbed 11% to $1.70 billion, suggesting new money is entering the market. Other indicators offer a mixed picture of who is driving the move. Funding rates are slightly negative, meaning short sellers are paying to maintain their positions, while NEAR’s 24-hour OI-adjusted cumulative volume delta is the strongest among major tokens, pointing to aggressive buying. If the rally continues, short sellers could be forced to close their positions.
SOL may be attracting additional shorts: Solana’s notional open interest increased 1.5% even as SOL declined 2%. A rise in open interest alongside a falling price typically indicates that new short positions are being established.
Selling pressure remains for a second day: The 24-hour cumulative volume delta was negative across most major cryptocurrencies, including BTC and ETH. NEAR and SUI were the exceptions. The data indicates that sellers continue to hit bids with market orders, similar to the previous session.
Bitcoin volatility moves up from yearly lows: BVIV, which tracks bitcoin’s 30-day implied volatility, rose 5% and turned higher after reaching levels near the year’s lows. The increase suggests renewed demand for options protection, although the index remains within its recent trading range. Some analysts have warned that the relatively calm conditions in crypto and U.S. stocks may not continue as bond-market volatility increases.
Options traders adopt a more defensive stance: Bitcoin’s one-week put-call skew increased to 10%, while one- and two-month skews turned slightly positive. The shift indicates greater demand for puts and downside protection compared with the largely neutral positioning seen a day earlier. Ether options showed a similar bias. Bitcoin and ether call options remained among Deribit’s five most-traded contracts over the previous 24 hours.
Token Moves
Solana-based DeFi tokens recovered from Wednesday’s losses even as SOL remained lower by about 1% since midnight UTC.
DEX aggregator Jupiter’s JUP token gained 15% over 24 hours. Raydium’s RAY and liquid-staking token JTO also climbed 14% and 10%, respectively. Both Jito and Jupiter had declined between 6% and 8% the previous day.
Several tokens associated with networks that promote their cryptographic systems as resistant to quantum threats also gained following Drake’s post.
Algorand’s ALGO led the CoinDesk 100 with a 9% gain since midnight. Algorand uses post-quantum Falcon signatures for its state proofs. Starknet’s STRK, whose proofs use hash-based cryptography, rose 4%.
Zcash, the largest privacy-focused cryptocurrency by market value, dropped 6% over 24 hours to around $1,240. Midnight’s NIGHT token, linked to the Cardano ecosystem, fell 8%. Monero was relatively stable, gaining about 0.5% since midnight.
Curve’s CRV rose 11% over 24 hours, while synthetic dollar token Ethena’s ENA declined 7%, leaving the broader DeFi sector split without a clear bullish catalyst.
AI-related tokens remained under pressure. Bittensor’s TAO fell 6% over 24 hours, Venice’s VVV dropped 7%, and Grass, a decentralized AI data network, also declined 7%.
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