Morning Minute: Ethereum Researcher Says AI May Break Crypto Encryption Before Quantum

Morning Minute is a daily newsletter written by Tyler Warner. The analysis and opinions expressed are his own and do not necessarily reflect those of Decrypt. And check out our daily news show ‘FOMO HOUR’ covering all of the top stories and market action.

Top News:

• Crypto majors fall another 2-3% along with stocks; BTC at $82.6k
• ETH Researcher Justin Drake warns of AI hacking, calls for “Bunker Mode”
• BTC ETFs see biggest day of outflows since late June
• Tom Lee says he’ll stop buying ETH at 5%, which he’ll reach soon
• Near Intents announced Confidential Intents on DarkSwap on Solana (Dark +169%)

BitcoinBTC · USD

$82,579−1.62%

24H7D1M1YYTD

Oct 1Oct 3Oct 5Oct 6Oct 8

$86.8k$85.3k$83.8k$82.3k

24h HighHigh$83,616

24h LowLow$82,115

VolVol$1.4B

Market projectionsOdds by Myriad

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🔐 Ethereum Researcher Says AI May Break Crypto Encryption Before Quantum

Justin Drake has spent years warning that quantum computers could eventually break the math protecting crypto wallets. On Wednesday, he said something more alarming: AI might get there first, and possibly within months.

Drake, a researcher at the Ethereum Foundation, called on the industry to start planning for what he called bunker mode. His advice is to move coins to fresh addresses that have never sent a transaction.

Here’s why that matters. Every wallet has a private key you keep secret and a public key derived from it. The public key stays hidden behind a scrambled version of itself until you spend from that wallet. The moment you send a transaction, your public key becomes visible on the blockchain forever. If someone figures out how to work backward from a public key to a private key, every wallet that has ever sent money is exposed. Wallets that have only ever received are not.

The system doing that math is called ECDSA, and Bitcoin and Ethereum both rely on it. Drake says it’s now reasonable to prepare for it breaking before quantum computers arrive, in the worst case in months rather than years. By breaking, he means recovering someone’s private key in about a week using a large cluster of graphics cards.

What changed his thinking is how fast AI is solving hard math. He pointed to 722 mathematical results OpenAI published Tuesday. His argument is that elliptic curves, the structure ECDSA is built on, have exactly the kind of rich mathematical patterns a superintelligent system might exploit, while the hashing used to hide public keys is designed to resist that.

He named Binance, Bitbank, Robinhood, Bitfinex, and Tether and asked them to harden their cold storage. He also offered small holders a strange comfort: roughly 20,000 addresses believed to belong to Bitcoin’s creator each hold 50 BTC with exposed public keys. Anyone who cracked this would likely go for those first. He calls it Satoshi’s shield.

So where does this leave us? Drake is careful to say don’t panic and don’t rush, and to begin the process of moving self-custodied crypto into new, safe wallets. But there are alternatives. Use the ETFs. Use a proven custodian like Coinbase. And if you want to hold your own keys, consider working with experts to ensure best practices.

Any action is likely better than just burying one’s head in the sand and hoping this all passes…

🌎 Macro Crypto and Markets

• Crypto majors are red down another 2-3%; BTC -1% at $82.6k; ETH -2% at $2,540; SOL -3% at $114; HYPE -4% at $86; ZEC -8% at $1,210
• Top alt movers include JUP (+16%), ALGO (+15%), STRK (+21%) and RAY (+7%)
• Oil +3% at $93; Gold even at $4,140
• Stock futures are red as oil and bonds keep going higher; DOW -0.9%, Nasdaq -0.8%
• Tom Lee said Bitmine will stop buying Ethereum once it holds 5% of supply, roughly 100,000 ETH away; ETH fell about 5% on the remarks, since Bitmine has bought every single week since June 2025
• House Financial Services Chair French Hill said the SEC and CFTC rules aren’t enough even while crediting both agencies for acting; he argued only a law gives lasting certainty and said he still hopes to pass the Clarity Act in the lame-duck session
• Government wallets moved $103 million in seized crypto Tuesday sending 833.6 Bitcoin to Coinbase Prime and 40,285 BNB to a fresh address; the Bitcoin traces to the Bitfinex hack and a separate fraud case
• Europol said crypto wallets are the main weak point for future quantum attacks in two reports published Wednesday; it concluded crypto won’t collapse but said wallets that have already revealed their public key can’t be fixed later and must move funds before any attack
• Wells Fargo is in talks with Kraken’s parent to supply crypto trading liquidity according to two people familiar with the matter; the bank would keep its own client relationships while Payward handles pricing and execution
• Polygon added Tron support to its payments stack opening access to the $94 billion of USDT on that network; businesses can now move Tether between Tron and Ethereum-style networks through one integration
• Gate said an all-in-one money app is crypto’s biggest consumer trend for this year and next, betting that users want spending, saving, and trading in a single place rather than separate apps

Corporate Treasuries & ETFs

Meme Coin Tracker

• Meme leaders were red; DOGE -3%, SHIB -2%, PEPE -1%, PENGU -1%, TRUMP even, SPX -6%, BONK -1%
• Robinhood chain leaders were red and continue downtrend; Pons -5% to $260M; AI -12% at $108M; Cashcat -7% at $120M; Hookr +60%, ZZZ +27% Bucket +60% led top movers
• Solana top movers included MET +50%, Dark +165%, Crawl +40% and Stupid Inu +160%

💰 Token, Airdrop & Protocol Tracker

• Hyperliquid led onchain protocols in revenue with $2.77M on the day, followed by Pumpfun at $2.57M and Stonk at $428k
• Hyperliquid’s Jeff Yan said he’d build an options product if he were starting over today, telling DAS Asia 2026 he no longer thinks perpetuals will absorb options traders; he said HIP-4 gives builders a direct path, since it can use Hyperliquid’s existing order book and margin system while perps hedge the risk
• Hyperliquid Labs unstaked 3.75 million HYPE worth about $330 million and sent half to five private buyers in its largest team distribution ever; the tokens are going to one undisclosed institution rather than being sold on exchanges
• Near Intents announced Confidential Intents on DarkSwap, allowing confidential swaps from Solana; DARK jumped 169% on the news

🚚 What is happening in NFTs?

• NFT leaders were mixed; Punks even at 33 ETH, BAYC +4% at 6.06 ETH, Pudgy -8% at 2.88 ETH
• Claus (+120%) and Trace (+19%) led top movers