In my last note, I said quantum computers probably won't kill Bitcoin, because the likely fix freezes the coins nobody can move.

The obvious next question: what if that fix never passes? What if someone cracks old keys and takes the coins?

Here's what that question skips. Taking bitcoin is one problem. Selling it is a different one. And 2026 already gave us a live test.

This summer's heist

In late July, attackers started draining Coldcard hardware wallets. A firmware bug from 2021 meant some devices skipped their hardware random number generator when creating a seed. Weak randomness means guessable keys. The attackers guessed them.

Galaxy Research has confirmed about 1,780 BTC stolen. That's well over $100 million.

Two months later, about 82% of it still sat in the thieves' own addresses.

The thieves hold the keys. Nobody can stop them from moving the coins. So why are the coins just sitting there?

Everyone is watching

Every bitcoin transaction is public, forever. The moment a theft is reported, analysts tag the addresses and exchanges get the list. From then on, those coins are marked.

To turn bitcoin into dollars, you eventually need an exchange or an OTC desk. Those run on licenses. Licenses come from governments. Send marked coins there and you hand over your identity.

So thieves take the long road. They split the coins into small pieces, swap them onto other chains, run them through mixers, and sell slowly through desks that ask fewer questions. Some of the Coldcard coins have started down that road.

It works, sometimes. But it's slow, it costs money at every step, and every step leaves another trail.

The October theft tied to Ledger devices sold through one Southeast Asian reseller shows the same thing. The stolen USDT got frozen by Tether within days, so the thief swapped into a stablecoin Tether can't freeze and pushed Ether through a mixer. Bitcoin's transparency pushes thieves off Bitcoin.

Six years, and still caught

In 2016, a hacker took 119,754 BTC from the exchange Bitfinex.

He managed to launder about 25,000 of them over the following years. The other 94,000 never left the wallet. In 2022, US agents found the private key in his cloud storage and seized them all, worth $3.6 billion at the time.

Six years of waiting didn't make the coins clean. It just made them worth more to the government that took them.

The closest thing to a quantum heist

In December 2020, the Chinese mining pool LuBian lost about 127,000 BTC. Its wallets had been created with weak randomness, so the keys could be found by brute force. That's what a quantum attack would do, just on easier keys.

The coins then sat untouched for about three and a half years.

In October 2025, the US Justice Department said it held 127,271 BTC and filed to forfeit them, calling it the largest forfeiture in its history. Washington says the coins belong to a Cambodian scam boss. China's cyber agency says the US took them by hacking back in 2020.

Whichever story is true, the pattern is the same: a cracked key, a pile of coins nobody could sell, and a superpower at the end of the chain.

Governments are collecting

Since March 2025, forfeited bitcoin in the US goes into a Strategic Bitcoin Reserve, and the order says it is not to be sold. The UK holds about 61,000 BTC from a fraud case. China is fighting the US over LuBian's coins.

When the biggest states treat stolen bitcoin as something to capture, every large theft becomes a prize for them too.

Now apply it to quantum

Who builds the first quantum computer that can break a Bitcoin key? Not a lone hacker. It will cost a fortune to build and to run. It will belong to a government, or a company that answers to one.

Two things follow from that.

The machine is worth more as a secret. A state that can read other states' encrypted traffic doesn't announce it by moving old bitcoin. The moment Satoshi-era coins move, the whole world knows the capability exists.

A dump hurts the thief first. Anyone sitting on a huge stolen pile crushes the value of their own loot by selling it all at once. And the coins most exposed to quantum, the oldest outputs, are the most watched coins on the chain.

Even theft has to play by market rules.

What this doesn't mean

Thieves do cash out. North Korea pushed much of the $1.5 billion it took from Bybit in 2025 through swaps and bridges within weeks. With enough patience and the right network, stolen crypto gets out.

So I'm not saying stolen bitcoin is stuck forever. I'm saying it comes out slowly, in pieces, and at a cost. Not in one crash.

The point

The quantum scare pictures a thief who takes millions of coins and dumps them the same afternoon. Real thieves don't work that way, because they can't. The chain is public, the exits are licensed, and governments are hunting for exactly these coins.

Stealing bitcoin is the easy part. Selling it is where thieves get stuck.

— Toru

Get the next one by email: torusasaki.com/notes

---

Figures on recent thefts are from public on-chain tracking and may change as investigations continue. This note is for research and education only. It is not investment advice, and nothing here is a recommendation to buy or sell anything. Make your own decisions.

Every few months, a headline says quantum computers are coming for Bitcoin. Price dips. Then everyone forgets.

Here's what the headlines skip. If the threat ever becomes real, the most likely fix takes coins out of play. Permanently.

The headline that scared everyone

In 2025, a 6-bit elliptic-curve key was broken on an IBM quantum computer. It made the rounds as "quantum cracks Bitcoin's crypto."

A 6-bit key has 64 possible values. A laptop can guess it in a blink.

Bitcoin uses 256-bit keys. That's about 1.16 × 10^77 combinations, close to the number of atoms in the universe. No machine that exists today is anywhere near breaking one.

So why does the headline still move price? Because "maybe it gets cracked faster than expected" is an open question. And open questions are easy to sell.

What's actually exposed

A quantum attacker needs your public key. For most addresses, the public key stays hidden until you spend. But not for all of them.

Glassnode says about 6.26 million BTC sit in addresses whose public key is already visible on-chain. That's roughly 31% of supply.

They live in three places:

• The oldest outputs (P2PK), including around 1.1 million coins attributed to Satoshi

• Addresses that were reused, so the key was revealed by an earlier spend

• Taproot outputs, which put the key on-chain by design

The fix on the table

Developers already have a draft plan. It's called BIP-361, from Jameson Lopp and co-authors. In plain terms:

• Phase A: once a quantum-safe address type exists, you get about 3 years. After that, you can't send coins to the old vulnerable formats.

• Phase B: about 2 years later, old signatures stop working. Coins that never moved are frozen.

• Phase C (maybe, later): a possible way to recover frozen coins by proving you hold the seed phrase. Not decided.

Move your coins in time, and you're fine. Don't, and they stay where they are. Forever.

A note on the timeline: BIP-361 is still a draft. Nothing is approved, and no dates are set. The "3 years" and "2 years" are what the draft proposes, not a schedule.

So what if BIP-361 never passes? Is Bitcoin finished? That is a different question, and it deserves its own note. I will cover it separately.

Who gets to decide

The people who decide are node operators, developers, and miners. They hold bitcoin. Every one of them pays for a bad decision out of their own pocket.

The alternative to a freeze is to rescue every coin, including the ones whose owners are gone. One study estimates that moving every UTXO to a safe format would take at least 76 days of the network's entire block space. No holder votes to shut their own money down for two and a half months.

Nobody washes a rental car. People are careless with things that aren't theirs.

Bitcoin works the other way. The people who make the call own the car. Which is why I don't think they'll choose the option that hurts the price.

Why this is bullish

The BIP-361 authors quote Satoshi themselves: "Lost coins only make everyone else's coins worth slightly more." Then they add the other side: "Quantum recovered coins only make everyone else's coins worth less."

That's the whole trade. Two things happen when a freeze goes through.

1. The overhang disappears. Not every exposed coin is at risk. Exchanges and active holders will move. The real problem is the coins nobody can move: lost wallets, Satoshi-era addresses, owners who are gone. One estimate puts that stranded pile at about 2.3 million BTC, roughly 12% of supply. At today's price, that's around $190 billion. Without a freeze, a future attacker could take those coins and sell them. With a freeze, that risk is gone for good.

2. The "quantum discount" disappears. Some big money stays out because of quantum risk. BlackRock lists it as a risk in its Bitcoin ETF filing. Once Bitcoin gets through the upgrade, that excuse is gone, and so is the discount that came with it.

You don't need anyone to buy anything for this to work. It's a buyback nobody has to pay for: the number of coins that can ever move gets fixed at a smaller number.

The wild card: Satoshi

Now the part nobody can model.

Satoshi's roughly 1.1 million coins haven't moved in over 15 years. A freeze deadline changes the question. If those coins are ever going to move, the window before the deadline is when they would.

If they move, it's the biggest story in Bitcoin's history. And the market will ask the obvious question: is he selling? That alone could hit the price hard, at least for a while.

Will it happen? Nobody knows. Not me, not anyone. Anyone who tells you otherwise is guessing.

But here's what doesn't change. Take Satoshi out of the math completely, and you still have the coins whose owners lost their keys years ago. Old wallets, dead hard drives, forgotten seed phrases. Those can't move before any deadline, because nobody can move them. Under a freeze, they're gone for good.

Satoshi or not, the supply that can ever move gets smaller.

The pattern

The more the market believes quantum is fatal, the bigger the move when it turns out not to be. That's "sell the rumor, buy the fact," playing out over years instead of days.

Next time a quantum headline knocks the price down, ask one question: who would vote to make their own coins worth less?

— Toru

Get the next one by email: torusasaki.com/notes

---

BIP-361 is a draft proposal; its phases and timings may change or never be adopted. Supply estimates are third-party estimates. This note is for research and education only. It is not investment advice, and nothing here is a recommendation to buy or sell anything. Make your own decisions.

Adapted from my Japanese article for Bitcoin Research Institute (bitcoin-research.jp), September 2025, updated with October 2026 data.

Data as of Oct 6, 2026, 00:58 UTC. Source: Deribit.

Bitcoin has been turned back at $87K three times.

$87,504 on Sep 21. $87,248 on Oct 2. $87,017 on Oct 5. Each high about $250 lower than the last.

The chart doesn't tell you why. The right side of the chart does. The video shows it in 25 seconds.

What the bars are

Open interest in Bitcoin options, by strike. Blue is calls, red is puts. One contract is one bitcoin. Think of it as a map of where the bets are sitting.

Three strikes stand out.

• $95K: 29,203 BTC of calls, about $2.5B

• $90K: 26,330 BTC, about $2.3B

• $100K: 22,232 BTC, about $1.9B

Together that's 77,766 BTC, about $6.7 billion. One third of every call open on Deribit sits at those three prices.

Spot is $85,858. The first wall is 4.8% away.

Why call it a wall

Every call has a seller. As price approaches the strike, the seller's hedging picks up. Under the usual assumption about how dealers are positioned, that hedging leans against the move. They sell rallies and buy dips.

My gamma estimate says dealers absorb about $262 million per 1% move, up 38% from last week. The three biggest contributors are $90K, $95K and $100K. All three are overhead.

One caveat. That assumption is less reliable in crypto than in equities. Treat it as terrain, not a forecast. Walls get run over when the news is big enough.

The walls moved

Since Oct 1, $90K lost 1,178 BTC of calls. $95K gained 1,110. $100K gained 988.

The nearest wall got thinner and the two behind it got thicker. Bulls raising their sights, or sellers stepping away?

Look inside. October 30 $90K calls fell by 3,364. $90K calls in the other expiries rose by 2,186. November 27 open interest grew 22% on the week. The $90K bet wasn't abandoned. It was pushed out in time.

$95K is a different animal. One structure sitting there is an Oct 30 butterfly: long 150 of the $90K calls, short 300 of the $95K, long 150 of the $100K. It cost about $82,000 and pays $750,000 if Bitcoin settles at exactly $95K. That's a bet on a landing spot, not a breakout. Part of the wall at $95K is somebody's target.

What big money bought this week

Not upside.

Over the last 24 hours, 37% of block combo volume was iron condors. Two of them, 200 lots each, both executed within an hour of Monday's ISM services report, where the prices index rose to 74.0.

The larger one expires Oct 23. Short the $83K put and the $89K call, long the $80K put and the $92K call. It makes about $253,000 if Bitcoin finishes between $83K and $89K, and loses up to $347,000 below $80K or above $92K.

That expiry lands after CPI on Oct 14 and five days before the FOMC on Oct 28. Somebody is betting CPI doesn't break the box.

The price of options says something else. Skew flipped to calls for the Oct 9 and Oct 16 expiries. From Oct 30 on, puts are still richer. The price tag says upside risk through CPI, downside risk from the FOMC. The money says box.

And at $87K itself. On Oct 5, as price touched $87,017, about 1,075 deep in-the-money Oct 30 calls were sold on screen, strikes $69K to $72K. Twelve hours later, 800 of the $70K calls were bought in one block for roughly $13.3 million. That isn't new money. It's a handoff.

Not one block this week was a standalone purchase of calls more than 10% out of the money.

What to watch

• $87K. A fourth rejection, or a close above it.

• Whether $90K call open interest keeps draining into November.

• CPI on Oct 14 against the $83K to $89K box.

The walls are overhead, and the biggest bets are on staying under them for now. My base case is the box holds through Oct 23. After the FOMC, I don't know.

Numbers instead of trendlines.

— Toru

---

This letter is for research and education only. It is not investment advice, and nothing here is a recommendation to buy or sell anything. Make your own decisions.

Data as of the Oct 2, 2026 close.

The dollar is being bought because people need it, not because they believe in it.

Payrolls came in at +29k against +90k expected. Core PCE has slowed to about 2% annualized over three months. The market has nearly priced out an October hike, which now sits in the mid-teens.

Yields went up anyway. The 10-year closed the week at 5.28%, up from 5.18%. The MOVE index, the bond market's volatility gauge, is still above 100.

When rates swing like this, margin requirements rise. Add month-end funding demand, and traders have to source dollars just to keep positions open. That's the bid under the dollar. Positioning in the dollar index has barely moved.

Under that headwind, a few assets have stopped going down. That's the thread this week.

WTI: only the front month fell

On the week, the November WTI contract fell 1.4% to about $91. December rose 0.8%. March 2027 rose 2.7%.

Every contract from December 2026 through December 2028 settled higher. Only the front month dropped.

That shape tells you this isn't a demand scare. It's a plumbing problem.

US refineries are in seasonal maintenance. EIA data showed utilization at 92.5% and crude runs down about 554,000 barrels a day. Refineries that aren't running can't take crude. So barrels pile up at Cushing, the delivery point for the contract, and the nearest contract has no one to take delivery.

The products side says the opposite of "glut." In the same EIA report, crude stocks rose 0.9 million barrels, but gasoline fell 1.7 million and distillates fell 2.3 million. Distillates now sit about 14% below their five-year average. Crude is backing up because it can't be turned into fuel fast enough, not because nobody wants fuel.

Brent barely moved. This is a US-local jam.

Who's trapped

From Sep 29 to the end of the week, as price fell from $94 to $90, about 28,000 new short contracts came in. Only 8,000 to 9,000 left. Roughly 20,000 are still there.

Each time price pushed toward $90, it bounced.

Now look at what it costs to hold those shorts.

For November, CME's maintenance margin is $9,052 for a short and $8,583 for a long. December is close to even. From January on, longs cost more.

Exchanges set margin by the risk they see. Right now, the risk sits on the short side of the next two months. The positioning is leaning one way, and the margin table says the exchange knows it.

A $3 to $4 bounce would put most of those 20,000 shorts underwater. Past that, $100 is not a stretch. My read is that once refineries come back, the front-month discount closes, and it can close fast.

When will you know?

The public signal is an EIA report showing Cushing stocks drawing. That's when you can say refineries are running again.

Price won't wait for it. Some players can call a refinery and ask. Some buy satellite data. Oil is a physical market, and the people who see the barrels know first.

So if you know someone shorting the front month because "oil is done," wish them luck with the accident.

Gold: below $4,150, the sellers thin out

Gold dropped hard on Monday, broke $4,300, and closed the week at $4,162.

$4,150 matters. Around that level, producers start reducing their short hedges. Near $4,050, physical buyers start testing bids. CFTC data shows the combined short hedges of producers and swap dealers, measured in dollars, have shrunk a lot. People holding metal are no longer in a hurry to sell it.

Open interest fell below 400,000 contracts this week. Everyone watches that number. Some will treat it as a place to buy.

The tell to watch: gold that stops falling while yields keep rising. If you see that and it looks wrong, it's usually physical buying underneath.

Bitcoin: it rose in the week rates misbehaved

MOVE above 100. A stronger dollar. Liquidity drained by corporate tax payments and month-end repo. In past weak phases, any one of those would have knocked Bitcoin down.

It rose.

Spot is doing the lifting. Price is climbing faster than futures open interest, so this isn't leverage. The futures curve looks skeptical, not euphoric. ETF inflows have recovered on a two-week average, and Strategy disclosed another 1,665 BTC on Sep 28.

The options market tells a more specific story. On Oct 2, after price spiked to about $87,250 on the payrolls miss and got pushed back, the week's largest block trades were bets on a landing, not a breakout. One call ratio spread, bought for about $20,000 in net premium, pays the most at $96K on Oct 30 and loses above $100K. A series of $90K / $95K / $100K butterflies centered on $95K.

Big money is betting on up. Not on unlimited up.

The market also hasn't dropped its downside insurance. Bitcoin crashed after each of the last three US midterms, and the market remembers.

Short-term holders' average cost sits around $73,000 to $74,000. From there, there's room before profit-taking pressure builds. I think $90K+ is clearly in view. Past that, I don't know.

The week ahead

Oct 7 is the day. A 10-year auction, with 3-year and 30-year auctions on either side, and the FOMC minutes the same afternoon. Bitcoin's 100-day moving average is also crossing above its 200-day around Oct 5 to 7. The mood around minutes day has flipped Bitcoin more than once.

The thing to watch across all three: does the MOVE index finally come down? If it does, margin frees up, and that money goes looking for risk.

Want the next note by email? One short note a week, free: torusasaki.com/notes

Numbers instead of trendlines.

— Toru

---

This letter is for research and education only. It is not investment advice, and nothing here is a recommendation to buy or sell anything. Make your own decisions.