risks

Google stated that its Willow quantum chip reduces the error rate in preparing the special states (Magic States) required for quantum computing by about 40 times through a method called "Cultivation." The related research was published this week in Science, which is expected to lower the hardware costs of future large-scale quantum computers and draw more attention to the potential threat of cracking Bitcoin wallets.Magic States are a key resource needed to perform certain quantum computing operations, and their preparation process consumes a significant amount of hardware. Google's experiment achieved about 99.99% state fidelity, but only about 8% of attempts passed the screening. Researchers indicated that future experiments need to be scaled up and issues such as real-time operation and error correction need to be addressed. In March of this year, Google estimated that under specific hardware assumptions, future quantum computers might only need fewer than 500,000 physical qubits to crack the cryptography used in Bitcoin and Ethereum wallets.For Bitcoin, some early wallets' public keys have been public since their mining, theoretically making them targets for future quantum attacks; while wallets with undisclosed public keys may face different attack conditions. However, this breakthrough does not mean that quantum computers are capable of cracking Bitcoin. Google's previous cost estimates for attacks assumed the use of efficient Magic States preparation schemes, so this result cannot simply be understood as a 40-fold reduction in the cost of cracking Bitcoin. Research is still in the advancement stage of quantum hardware and error correction technology, and the complete equipment and engineering capabilities required for actual attacks have not yet been realized.

The white-haired stock god Serenity stated that the storage chip industry is experiencing unprecedented long-term demand visibility, with large cloud service providers like Google even seeking to sign long-term supply agreements extending to 2035. However, the market is still affected by concerns over the sustainability of AI infrastructure investments and financing risks.Serenity also cited the views of Dell CEO Michael Dell, who indicated that the shortage of storage chip supply may last for about 4 years, as the construction cycle for new fabs is relatively long, and the related capacity is expected to be released by 2029 to 2030. Dell anticipates that the imbalance between supply and demand for storage chips may further worsen by 2027.

Bank of America warns that the AI investment boom is showing signs of classic capital cycle risks, manifested in a surge in spending, intensified competition, and falling prices.The capital expenditure expectations of hyperscale cloud vendors have jumped from $330 billion to $1 trillion, roughly equivalent to 3% of the U.S. GDP. Meanwhile, since the summer, the prices of AI tokens have dropped by about 50%, and the increase in usage may not translate into sufficient revenue. The key risk is that AI technology may succeed, but investors could be harmed by over-investment and declining returns.

CryptoQuant founder Ki Young Ju posted on X that despite the market's attention on the adjustments to MSCI-related rules, Wall Street analysts remain generally bullish on Strategy. He noted that Citigroup, Barclays, and B. Riley have set target prices for MSTR at $240, $175, and $195 respectively, with an overall upward trend in target prices.He believes that the impact related to MSCI is primarily at the level of capital flow and has already been priced in by the market. He further stated that what is more noteworthy is that the market capitalization of Strategy compared to the net asset value of Bitcoin (mNAV) is about 1 times, the STRC price remains near par value, and the company holds $3.75 billion in reserve funds to cover dividend payments.

According to CoinDesk, nine cryptocurrency companies announced the establishment of a Quantum Alliance on Thursday, planning to develop universal security standards for Bitcoin, Ethereum, and other blockchain networks to address the threats posed by future quantum computers.The alliance estimates that about 6.4 million Bitcoins, or 30.2% of the supply, have their public keys exposed, and future quantum computers could reverse-engineer wallet public keys to recover private keys and steal assets. The alliance explained that since no quantum computer currently has sufficient computing power, these Bitcoins cannot be stolen in this manner for the time being. Members include Hacken, Midnight Foundation under Charles Hoskinson, the quantum-resistant layer one blockchain Quantus, and Postquant Labs.There are significant differences in the industry regarding when the quantum threat will arrive. Bryn Bennett, Chief Revenue Officer of The Vault, stated that no one knows the exact date, but estimates are continuously being revised downward, and this risk can be planned for in advance. The question for custodians is not whether the threat will appear in 2028 or 2035, but whether they can complete the migration if it arrives earlier.Richard Carback, Chief Technology Officer of Postquant Labs, believes that it is realistic for machines capable of breaking existing cryptography to emerge by 2028. Recent research has lowered the estimates of the computing power required to attack Bitcoin and Ethereum, but currently, no existing machines can break their cryptography, and related predictions remain controversial.The question of whether to freeze vulnerable Bitcoins has also sparked debate. Bennett pointed out that no one is responsible for this issue; custodians only protect client assets, not abandoned assets. Freezing tokens is a governance decision of the Bitcoin network, and any freeze would set a precedent of exchanging quantum risk for property rights and neutrality. Carback prefers to transfer vulnerable tokens and suggested placing them in a trust, allowing holders who can prove ownership to reclaim their funds.Binance founder Changpeng Zhao once suggested that if quantum technology advances and Satoshi Nakamoto's approximately 1.1 million Bitcoins remain untouched, they should be frozen; Bitcoin developer Jameson Lopp also proposed limiting vulnerable tokens to prevent theft, but critics argue that freezing someone else's Bitcoins contradicts the promise that no one can confiscate Bitcoins. Achieving quantum resistance requires replacing the digital signatures that authorize transactions, which necessitates consensus among developers, miners, wallet service providers, exchanges, and users. The new signatures may also occupy more block space, increasing transaction fees or reducing the number of transactions Bitcoin can process.

Federal Reserve Chairman Waller stated that the Federal Reserve needs to consider financial stability risks.

According to Bloomberg, the cryptocurrency market is experiencing a tug-of-war between bulls and bears, with analysts still leaning bullish, but the speculative market is shifting towards defense, putting pressure on risk appetite. Bitcoin briefly fell below $80,000 for the first time in nearly a month; affected by the sell-off in the U.S. stock market's AI sector, risk assets retreated, and the bullish sentiment that the cryptocurrency market was trying to rebuild was once again thwarted.Jeff Anderson, head of STS Digital in the U.S., stated that inflation data will "severely impact risk appetite," and the market is entering a quiet period before the Federal Reserve's interest rate meeting, with interest rate expectations still uncertain. Nick Forster, founder of Derive.xyz, mentioned that in the past 24 hours, the market's pricing of Bitcoin's probability of rising to $100,000 before Christmas has decreased by 2.8 percentage points to 9.7%; long-term bullish bets have quickly retreated, short-term hedging demand has surged, and institutions are reassessing macro risk exposure as the interest rate outlook becomes unclear again.

J.P. Morgan strategist Nikolaos Panigirtzoglou pointed out that the AI stock sell-off in October may be difficult to replicate the rapid rebound seen in July. Compared to before, the current market's willingness to buy on dips has weakened, short positions are insufficient to provide potential short-covering buying, corporate buyback funds are also decreasing, and at the same time, leveraged exposure in ETFs is being rebuilt, which may further amplify market volatility. J.P. Morgan believes that, based on investor positioning and capital flows, AI infrastructure stocks do not yet appear to be in an oversold state.This round of sell-off has spread from South Korean memory chip stocks to the U.S. semiconductor sector. SK Hynix and Samsung Electronics have both seen their stock prices drop by nearly one-third over the past month, and the Philadelphia Semiconductor Index has fallen 10% over the last five trading days. Additionally, the combined $40 billion stock buyback plan previously announced by the two companies was completed ahead of schedule in mid-October, which may have caused the market to lose some of the buying support brought by corporate buybacks.Meanwhile, BlackRock CEO Larry Fink warned that if the U.S. halts data center construction, the economy could fall into recession. He stated that a significant portion of U.S. economic growth is related to capital expenditures in AI infrastructure. As market concerns deepen regarding the return on AI investments and corporate profitability, price adjustments in the AI supply chain could also impact data center construction, energy infrastructure, and related employment sectors.

According to Gate's market data, global technology hardware stocks continue to decline due to expectations of interest rate hikes by the Federal Reserve and difficulties in AI financing. South Korea's Samsung Electronics fell over 7%, SK Hynix dropped more than 8%, dragging the KOSPI index down by more than 6% at one point. The Nikkei 225 index fell over 3% during the session. Despite strong earnings reports from Samsung and ASML, investor confidence remains under pressure.CoreWeave's stock price plummeted, and bond prices reflect financial distress. The U.S. CPI in September reached a 5-month high, intensifying expectations for interest rate hikes.

Six informed sources stated that banking regulators are intensifying efforts to curb the escalating risks associated with artificial intelligence. Some of these individuals pointed out that cyberattacks on banks or uncontrolled intelligent agents could undermine global financial stability.

The International Monetary Fund warns that since the last stability report in April, risks in the bond market have increased.

Web3 security platform Blockaid co-founder Ido Ben-Natan posted on the X platform that since the release of the first half report in August, the number of on-chain cybersecurity incidents has continued to reach historical highs month by month. Attackers, motivated by profit, find that attacking on-chain infrastructure offers the highest return for hackers, and this trend will become even more severe as the funds callable by AI agents increase.According to Fortune, Ben-Natan stated that the company is currently in its "busiest ever" state, one reason being the significant increase in hacker attacks. Additionally, Nansen CEO Alex Svanevik predicted that by 2028, trading cryptocurrency assets through AI agents rather than manual interface clicks will become the norm.

The media and conference organization NEXTPredict announced that it has executed the first trade in the flight cancellation market through Kalshi to hedge investments for its October summit, locking in $3 million in guarantees. The company paid a premium of $12,000, and if the cancellation rate of flights arriving at New York's Kennedy International Airport on October 21 exceeds 50%, the contract will automatically pay out, covering the summit costs, as October 21 is the main travel day for attendees. Susquehanna acted as the market maker for this transaction.Kalshi launched the flight cancellation market after self-certifying the contract with the U.S. Commodity Futures Trading Commission (CFTC) on July 14, allowing participants to trade on whether the cancellation volume at specific airports exceeds preset thresholds. This market does not target individual flights and has clear anti-manipulation clauses. NEXTPredict is a media and event platform focused on the global prediction market industry, launched by the NEXT.io team. Its flagship event, the "Global Prediction Market Summit," will be held from October 22 to 23, 2026, at Convene Hudson Yards in New York, bringing together founders, executives, investors, and policymakers.NEXTPredict and Kalshi position this trade as institutional hedging, similar to how airlines hedge against fuel costs or farmers hedge against crop yields, rather than betting on the fate of the summit.

According to official news from Aptos, the Aptos mainnet has officially launched the Encrypted Mempool feature. Users can choose to encrypt pending transactions before block finalization, keeping the transaction call functions and input content encrypted before execution, while the sender's address and fee information remain visible to the outside.This feature is mainly aimed at institutions (to avoid exposing intentions of large orders in advance), traders (to reduce MEV arbitrage risks), and AI entities (to ensure transaction inputs remain private before execution).

10x Research published that Bitcoin option prices have fallen to a five-year low, with near-month implied volatility at 33.5%, more than 4 percentage points lower than actual volatility, indicating that option pricing is relatively cheap. In the past week, the skew of Bitcoin options has decreased by nearly 3 percentage points, with traders focusing on buying put options expiring in October with strike prices of $78,000 and $80,000, with single large trades reaching up to $204 million.10x Research believes this indicates that investors overall still hold long positions while hedging downside risks through options, rather than fully turning bearish. In contrast, the Ethereum options market shows different signals. Its largest corporate buyer has indicated that it will stop buying in the coming weeks, with options trading primarily dominated by sellers of call options, and implied volatility higher than actual volatility.

According to Cointelegraph, the Financial Stability Board (FSB) warned in a document submitted to G20 finance ministers and central bank governors that cross-border regulation of stablecoins, crisis management mechanisms, and AI-related cybersecurity risks still need further improvement.FSB Chair Andrew Bailey stated that the current cross-border regulation of stablecoins and crisis management mechanisms "are still immature or have not yet been established."

Microsoft CEO Satya Nadella published an article discussing the trust framework for the era of superintelligence. He stated that traditional software can trace behaviors back to specific code paths, whereas current superintelligent systems lack this mechanistic understanding and cannot attribute model behaviors and outputs to specific training data or weight configurations. However, they are being deployed and are accessing sensitive data, executing critical actions on behalf of others. He emphasized that responsibility for intelligent behavior cannot be outsourced to model providers, nor can superintelligence be accepted or rejected as a series of nested black boxes.Nadella proposed that the supply of intelligence should be separated from the authorization of intelligence, surrounding nondeterministic models with deterministic system design, human control, and operational procedures, and establishing industry standards when existing standards are insufficient. He suggested managing cutting-edge models with closed-source and open-source weights as internal risks, not because they are inherently malicious, but because agents with sufficient capability that can access important systems may make mistakes or be compromised. Relevant practices include establishing identities, restricting permissions, recording activities, and setting isolation boundaries, with the transparency of the model's reasoning chain becoming a non-negotiable starting point.He further stated that permissions and action controls must be placed outside the model, and the model, orchestration layer, and action space should be separated. Principles include avoiding reliance on a single model as the sole dependency for important outcomes or for verifying its own work, ensuring that critical actions leave tamper-proof and human-readable evidence, continuously testing for failures, attacks, and boundary conditions, allowing organizations to independently decide on access and action permissions, validating independently of the intelligence being verified, presuming that the model has been compromised and supporting mid-course pauses or shutdowns, and timely disclosing and sharing lessons within the industry when failures or compromises occur. He concluded that the most trustworthy superintelligent systems are those that require the least trust in the model itself.

Cryptocurrency analyst Darkfost stated that after the security incident involving Ledger dealer CryptoBilis, discussions in the community have also brought up other potentially related dealer names, including some Lazada merchants.Darkfost indicated that the full extent of the incident's impact is still difficult to confirm. Although Ledger has confirmed a connection to the CryptoBilis incident, it is still unclear whether CryptoBilis is the only affected dealer. He compiled a list of Ledger dealers that may be at risk, stating that these dealers are in close proximity and could potentially have their supply chains compromised simultaneously. However, Darkfost emphasized that this assessment is merely speculative and has not yet been confirmed.Darkfost suggested that if users have purchased Ledger devices from the relevant dealers in the past six months, they may consider transferring their assets to other secure devices until the investigation into the incident is complete. Additionally, he mentioned that users can refer to the guidelines published by security researcher MagicalTux to check their Ledger devices for any signs of tampering.

According to CoinDesk, it has been one year since the "1011 crash" that triggered approximately $19 billion in leveraged liquidations in the crypto market. Analysts warn that the potential structural risks that caused this flash crash still exist.In October 2025, Bitcoin experienced a sudden flash crash just days after reaching a historic high of over $126,000, plummeting from around $122,000 to $105,000 in a short period, leading to a concentrated liquidation of large leveraged long positions.Mark Connors, an analyst at Risk Dimensions, pointed out that recent short-term price movements are still highly driven by derivatives such as perpetual contracts rather than on-chain data. The exchanges' inclination towards high-leverage products has also failed to eliminate the risks of flash crashes; moreover, the traditional four-year halving cycle has changed, with macroeconomic and political forces playing a more critical role.Chris Sullivan, co-founder of Hyperion Decimus, suggested that traders should avoid excessive leverage, closely monitor open interest, funding rates, and market sentiment indicators, while long-term investors should consider moving their assets off trading platforms to self-custody.