Ivan on Tech analyzes Bitcoin's position near the 200-week moving average and discusses institutional behavior, hardware wallet vulnerabilities, and market trends
Ivan on Tech presents a solo market analysis covering Bitcoin's technical position, institutional buying and selling patterns, the Michael Saylor/MicroStrategy situation, hardware wallet security concerns, and broader crypto and stock market developments.
Summary
Ivan on Tech argues that Bitcoin is approaching the end of its bear market, with the price holding near the 200-week moving average despite significant institutional selling — which he interprets as a bullish signal, not a bearish one. He presents data showing multiple large institutions (Brevan Howard, Graham Capital, an unnamed MU group) selling large portions of their Bitcoin ETF positions in Q2, while Jane Street is simultaneously accumulating, and argues that price stability in the face of this selling confirms the bear market is ending. A significant portion of the episode is devoted to a MicroStrategy shareholder meeting clip in which a retail investor reveals he put $219,000 of his children's money into MSTR, which has since fallen to approximately $60,000, and Michael Saylor's team responds by telling him to hold for the long term. Ivan also covers hardware wallet vulnerabilities affecting Bitbox and a Windows-based replay attack affecting YubiKey users, the NASDAQ's move toward 24/7 trading, Kazakhstan's suspension of capital gains tax on crypto, and Ansem's new token launchpad platform.
Key Takeaways
FULL TRANSCRIPT
Bitcoin's Technical Position: The 200-Week Moving Average and the Money Line Flip
Ivan on Tech: Right now we're still at around the 200-week moving average. The buy zone has been moving to the upside as the 200-week moving average has also been moving to the upside. I want to show you something very beautiful right here — the money line flip is now at $79,400, and the buy zone and the money line flip are going to meet within the coming weeks, within the coming month or so.
Why is this so important? Because as you know, when we go bullish on the money line, that's when the Valhalla starts. That's when the god candles start. That's when the big fat beautiful bull market is here — just like it came back in 2023, right here when we hit the buy zone yet again, and when the money line flipped bullish. It was a fantastic time. We have similar things going on right here.
As a reminder, the buy zone is based on the 200-week moving average. So when it moves to the upside, the buy zone also moves to the upside. Now we're in such a great position. We exited crypto here in Q4, in October. We're redeploying here — cheap, cheap, cheap for Bitcoin. Cheap as hell.
When Bitcoin goes into a bull trend, that's also when we will allocate into altcoins. And that's where we're also going to be speaking bullish about altcoins. For now, we're careful with altcoins. Altcoins could still have a big downside in case Bitcoin decides to take another leg down. For Bitcoin, it's not going to be an issue. Why? Because if we go down 10%, 20%, it's okay — you just accumulate more down here. But altcoins can still drop a lot. So that's the situation with Bitcoin and altcoins.
Peter Schiff, Institutional Selling, and Why Price Is Holding
Peter Schiff is not happy because we're at the end of the bear. At the end of the bear, Bitcoin does not dump a lot. It doesn't dump based on bad news. It doesn't dump based on macro. It doesn't dump based on anything. And so Peter Schiff doesn't really understand how come Saylor is selling every week — either he's selling Bitcoin or he's selling MicroStrategy — but Bitcoin is still holding. How come, when the ETFs are outflowing so much, Bitcoin is still holding? His brain cannot comprehend that Bitcoin is actually now exiting the bear. And when we exit the bear, the bearishness simply does not work. Instead, it's time to be bullish. It's time to see the bright side of things.
This is also key to understand from the stock market perspective. The stock market is mega bullish still. The EU is coping hard. The ECB is saying that the AI rally is going to set off a stock market correction, that a stock market correction is coming. Where is the European Central Bank? The last people you want to listen to when it comes to investments are the people at the European Central Bank, because they were bearish Bitcoin at the very bottom in the last cycle. They are not the brightest when it comes to markets, and they are coping hard. They're coping hard because EU stocks are not pumping. Nothing is pumping in the EU. No one cares about the EU stock market. US stocks pump a lot, and the cope is absolutely beautiful.
Meanwhile, you have Jane Street buying $630 million of Bitcoin ETFs in Q2. It is time to accumulate. Institutions know that, and they do accumulate.
Kazakhstan, Institutional Sellers, and the Bottom
At the same time, you have Kazakhstan signing a decree suspending all capital gains on Bitcoin and crypto. Kazakhstan is really up and coming when it comes to digital transformation, entrepreneurship, and crypto. They want to ensure that as much money as possible is coming into the country, and that's very, very good.
At the same time, you have some other institutions — for example, this MU group — that sold 60% of their Bitcoin ETF position. This is not smart. This is not smart at all. Jane Street is scooping up all of these sells. As you can see, they sold a lot, but the price doesn't move. Price holds. All of these institutions that are selling the bottom — literally selling the bottom — are making the worst possible decision from a Bitcoin accumulation standpoint, from a long-term perspective standpoint, because the time to be bearish was in October. That's when we were bearish. We were bearish in October. Now it's time to be bullish — a big fat beautiful bull.
Here's another one. Brevan Howard sold 70% of its ETF position in Q2. They're doing the exact opposite of what they should. And this is where the suits are not always correct. Jane Street has a good track record of being correct. At the same time, many suits and their clients are still emotionally driven. When Bitcoin pumps, they buy. When Bitcoin dumps, they dump — especially at the bottom.
So all in all, you see the conclusion. The conclusion is that all of them are selling, the price holds. Here's another one — Graham Capital sold 75% of its position in Q2, and price holds very, very nicely. That's exactly how it should be when we are towards the end of the bear market.
And again, Peter Schiff is saying, "I'm not sure why Bitcoin did not sell off today." Yeah, I know why — bear market ending. There are simply not too many sellers. And the sellers that do sell, there are buyers scooping up at the 200-week moving average. Everyone who is a long-term believer in Bitcoin knows that the 200-week moving average is cheap, cheap, cheap. That's why our buy zone is at the 200-week moving average. It's based off the 200-week moving average. So you have such demand here at the 200-week moving average that whoever wants to exit — their sells do not move the market at all right now.
Hardware Wallet Vulnerabilities: Bitbox and YubiKey
Unfortunately, there's another hack in hardware wallets. Bitbox — it's some kind of hardware wallet. I don't know who uses these weird small hardware wallets, but there's a new vulnerability. If you have Bitbox, the name itself sounds off to me. Bitbox. It's not serious. It doesn't give me trust. It doesn't give me peace of mind if my money is in Bitbox.
Anyway, if your money is in Bitbox, you have to be careful because they disclosed two severe hardware wallet vulnerabilities. They said there are no reports that any of the vulnerabilities have been exploited, and they have fixed them. One vulnerability affecting Bitbox multi-devices could allow a malicious host to execute arbitrary code and potentially install malicious firmware. Another flaw in silent payments could allow an attacker using a malicious host device to redirect funds to an address.
So yeah, there you go. If you have your money in Bitbox, be extremely careful. The Swiss-made branding levels it up a bit — it's better — but at the same time, you can move to Switzerland, anyone can do business in Switzerland. It's good branding, but it doesn't inherently guarantee anything.
NASDAQ 24/7 Trading and the Cryptoification of Markets
Moving on — we have the cryptoification of the entire stock market. NASDAQ has officially begun filing with regulators to enable 24/7 stock trading. So you're going to have 24-hour stock trading. No rest. Which means anything can happen at any time. Your bags can go to zero while you're asleep if you don't have a good system.
It's very important to understand that currently the way it works with the stock market, you have the traditional real stock market and then you have derivatives. Derivatives trade 24/7. For example, you can trade stocks on Hyperliquid 24/7. Obviously, there's a gap there — you have the real trading, spot trading, and derivatives — and they want to close that gap. Because at the end of the day, it's already possible to trade everything 24/7, but you have to use assets which are not real assets — they're derivatives. So the idea is that everyone is trading 24/7 anyway, so let's make it the default and have people actually trade the actual assets and not some weird derivative contract. I think that makes sense. It's a question of time before it would happen, because practically it is already 24/7 — just that you need to trade on some weird venue.
ECB Warns of AI Bubble; MicroStrategy and Jane Street
Next, you have stocks being in a bubble, says the ECB. Stocks could be headed for a correction as AI enthusiasm pushes tech valuations towards dot-com bubble levels. Again, it could be true, but just follow the trend. You know our stance — we just follow the damn trend, and the trend is up. Looking at the stock market, you have the S&P around all-time high, NASDAQ around all-time high, also in a bull trend. Could it be that the ECB actually calls the top on AI stocks? Obviously it's possible, but practically you act only when trends shift.
Jane Street also bought $225 million of Michael Saylor's Strategy shares. As Bitcoin will pump, so will Strategy. This is very important — in the bear market we're bearish Strategy. In the bear market we stay away from Strategy. All of this house of cards that Saylor is building — in the bull market it's going to pump because it's a bull market. When Bitcoin pumps, Strategy will also pump because it's like leveraged Bitcoin.
Now they dump MicroStrategy to be able to pay dividends to STRP. But as the bull market comes back, MicroStrategy will also pump. So don't confuse when we're bearish in the bear with the bull, because in the bull the rules are different. It's still in a bear trend, but as Bitcoin bottoms out and starts to recover, so will MicroStrategy. Because then — if you look past the house of cards — they have Bitcoin on the balance sheet, and their stock price is going to be connected to Bitcoin. Because they try to get more than one times NAV when you look at how much Bitcoin is backing every share, they want to get it above one. So if it's above one, it means it's going to pump more in the bull, but also dump more in the bear.
So Jane Street is accumulating and positioning. It's also important to understand the FUD around MicroStrategy. Number one — they're dumping the crap out of the main stock. They're dumping MicroStrategy every day in order to raise money to pay the dividend for STRP. So STRP maybe goes back to $100, but they are so far unsuccessful in doing that because STRP is below $100 and they cannot use STRP to raise money. They're trying to bring it back to $100. The market does not care. The market really does not care because they see that it's overleveraged — that STRP is taking out debt at very high percent. What is it, 10, 11, 12%? Technically it's not debt, it's stock, but practically it is debt, because if he stops paying, the trust in the whole thing is going to collapse. It's a house of cards. It's going to be very hard to keep it going.
So that's the number one FUD — he's selling MicroStrategy stock in order to try to pump STRP, but STRP does not pump. And then another type of FUD that is important to look at: MSCI removal of MicroStrategy in the coming months would cost around $3 billion in selling. MicroStrategy is already in the bottom five of the NASDAQ 100. So there is also the possibility that they end up removed from that index as well. There's more pain coming if Bitcoin doesn't magically rip higher. This is key — if Bitcoin rips higher, so will MicroStrategy. So hopefully for the MicroStrategy holders, Bitcoin starts moving before they are removed from all of these key indexes.
The MicroStrategy Shareholder Who Invested His Children's Money
The shareholders are getting worried. They're sounding the alarm on MicroStrategy. I will soon play you the video. This story is so common. When people join Bulmania, we always take a call with them before we allow them in so we understand who they are, and we hear this story so much — whether it is MicroStrategy, whether it is a shitcoin or altcoin, they believe in some fugazi, they lose their family wealth, they come for help, and we fix it for them. It happens all the time. So just keep it in mind. This is a story as old as history.
Let's go through what he says, and if you're in a similar situation, how to act. Listen to this.
The moderator at the shareholder meeting reads out a question:
"We have a question from Rob. He said, 'I have three children and I invested $73,000 each into MSTR believing in the long-term potential. Today that $73,000 is worth $20,000.'"
Wait — he invested not $70K together. It's like $220K. Listen again.
"He said, 'I have three children and I invested $73,000 each...'"
$73K each. So $219K in total into the house of cards.
"'...into MSTR believing in the long-term potential. Today that $73,000 is worth $20,000, and the long-term potential is now in question.'"
Oh my god. So now it's $60K total. It was $220K, now it's $60K. Guys, it may seem crazy, but it's not that uncommon in crypto to lose this much. And many people lose even more. And again, you top-blast your kids' money into some ticker. Maybe it made sense at the time. In a bull trend, if you have a stop-loss, if you have everything in place, you have a strategy, you know mechanical rules — it's okay. Your stop-loss will hit, you're going to lose some percent. It's fine. It's not a problem.
The problem is you hoddle throughout this and you listen to the fugazi and you think it's going to be okay. Unfortunately, it's not always going to be okay. If you hoddle long enough, it should technically be okay. But when he bought with $220K, did he ever think that his bag would be $60K? If I can tell you — no. He would never have put in $220K if he ever thought it was going to go to $60K. So what do you do when you enter something? You need to know where is my max pain, how many percent, where is the stop-loss, where is my max pain. Otherwise, if you just sit and watch it drop, you can easily go from $220K to $60K. And you never ever wanted that when you started.
But people don't think that something that is $220K can go to $60K. It seems unbelievable. But in crypto, it's literally a matter of a few weeks. We can take your $220K and give you back $60K in like a few weeks. We're the best in the world at taking the money.
The moderator continues reading:
"'...of getting back to break even. MSTR common shareholders seem to be your lowest priority. You defend STRP and pay down converts using MSTR at-the-market offerings. Achieving BTC per share yield doesn't do much for my kids.'"
Exactly. He's dumping MSTR each and every week, and his kids' money disappears. And each and every week Saylor is dumping and dumping. So maybe STRP is going to go to $100, but it doesn't. So each and every week Saylor keeps dumping MSTR.
"'I have a decade-long perspective, but I'm worried that you will ATM so much that we'll never get back to $325 a share. Have you considered paying out a dividend to MSTR common shareholders, simply to do something right by them in the near term?'"
Then Saylor responds:
"I can start on that, and Mike can add. Rob, thanks for being a shareholder and investing some money into MSTR for your children. Of course the common shareholders of MSTR is our most important priority, and creating value and increasing the price of MSTR is our number one priority. How do we do that? We do that by outperforming Bitcoin. And since the beginning of our strategy of putting Bitcoin on our balance sheet — that was August of 2020 — Bitcoin's been up 32%, MSTR has been up 41%. So we've outperformed Bitcoin over time, and I understand that you came in later and haven't seen that outperformance. What happens over time — when Bitcoin's up, we tend to go up more because we have more Bitcoin per share, and we do that via historically leverage and more recently via amplification..."
It's a very long video — eight minutes. The gist of it is that he says hold for the long term, because if Bitcoin is going to pump, we'll also pump. Now, of course, the weekly sells by the company are diluting MSTR holders. When Saylor dumps MSTR each and every week to raise money for STRP, he's diluting holders. So for eight minutes they basically say hoddle, hoddle, hoddle for the long term.
Let me fast forward to where Saylor says the same thing:
"If you want a dividend, you should buy one of the preferred stocks. Like STRD pays almost a 15% effective yield. So if you're looking..."
But he doesn't want a dividend. He wants the stock to pump. He doesn't want a small dividend of a few percent. No one wants it. He wanted the stock to go to Valhalla, and it went down 80%. That's the problem. He's asking for a dividend so the stock pumps. Don't divert the question. He did not ask for a dividend — he asked for something that would make the stock go to Valhalla.
"...for a stable instrument that pays a dividend, I would look to STRC or STRK — they were designed to pay dividends and give some upside. If your time horizon is less than four months, you probably should own a money market. If you want to make an investment and want the money back or want to see a good return in four months to four years, you're probably a credit investor and you ought to consider one of the credit instruments. If you're holding the equity, then you need a time horizon of a minimum of four years — ideally seven to ten years. Bitcoin was at an all-time high about a year ago. So when we're in a bear market, you're going to get more amplified Bitcoin..."
Then there's four more minutes of basically hoddle, hoddle, hoddle.
So guys, yeah — don't put yourself in a position you don't want to be in. Obviously, the guy did not want to be in this position. And he's basically told: you bought this, it's not our fault. Bitcoin is down, we're down. If you want a dividend, buy the other stock. If you want Valhalla — no crying in the casino. You're down 80%. Have a ten-year time horizon. That's it.
And listen — nothing wrong. It is true. No crying in the casino. But people don't use their brain. They don't invest correctly. They put themselves in positions they never wanted to be in. I agree — no crying in the casino. In the casino, only risk manage. If you don't risk manage, you are on your own.
Nike Stock and Position Tracking with Bulmania AI
That's that, guys. If you have Nike stock — Nike stock is not doing well. If you invested $10K into Nike stock five years ago, you would have $2,300 today. If you invested $10K into the S&P 500, you would have $17K today.
Let's actually check the Nike stock. What's happening? It's down only. Don't touch. Don't touch. It's a falling knife like there's no tomorrow.
By the way, guys, in Bulmania AI we just added that you can enter your position. So for example, you enter what you're long on, which time frame, what you're short on, which time frame. And then you can basically generate a report each and every day on what's happening. For example, I entered here — you see that I'm long BTC and Hyperliquid, and I'm short Zcash and ADA. Then you get a report here. You can just ask AI to give you a report. You see this button — when you click new chat, you have this button: "Give me a report on my open positions." And then it tells you, for example, Bitcoin is bullish and it is with you because you are long. Hyperliquid is bearish, so it's against you.
So here's the thing — if that guy who had MicroStrategy stock had just put it in Bulmania AI, he would know exactly what's happening. The same thing for all the bag holders of Nike. You say Nike, you put it in your open positions. Let's say here you go to stocks and you just write the ticker — NKE. Let's say you're bullish. It's going to warn you like there's no tomorrow. This is the best, man. You come here every day, you get the report on your positions, and the intelligence of Bulmania AI is going to tell you everything about it.
US Treasury, the Genius Act, and Stablecoin Regulation
The US Treasury reveals Japan, China, and the UK all sold US treasuries in June. This is important. The interest rates on US treasuries are going up — the yield is going up because all countries are dumping US treasuries. Ultimately, this is going to lead to the Fed buying US treasuries from the market, because you cannot have too high a yield. So it's a question of time before the Fed starts buying treasuries to support the market. If they keep dumping, the Fed will step in.
Also, Treasury Secretary Scott Bessent is saying: "POTUS and Congress delivered the Genius Act, establishing a landmark framework and clear rules of the road for payment stablecoins, and Treasury is moving quickly to implement that framework. US Treasury welcomes input from stakeholders as we work to provide regulatory certainty." So it's good for all US businesses doing anything with stablecoins. The administration is going to implement the Genius Act, which is very good.
Ansem's Token Launchpad: The Z500 Index
Next, if you look at Ansem, he's making moves. He's making all kinds of moves. As you know, with his coin ANSM, he did a memecoin. In the beginning, it was only a memecoin. Now, what happened? He launched a launchpad — Ansem IIO. He says 30,000-plus tokens are launched daily, 1,000 bonds, even smaller amounts reach $1 million market cap. ANSM allows new teams to market to ANSM holders.
On this announcement, the ANSM chart did put in a bit of a candle. Let's see — trading view doesn't have DEXes. Let's check CoinEx. If we go to daily, you see that it did print a bit of a god candle yesterday, all the way to $0.35. Holy crap. Now it's back to $0.25. So some people made a lot of money. If you knew about this announcement, you made a lot of money. Now it's kind of back — it was $0.35, now $0.206. Just a month ago it was also at $0.25, then went to like $0.07. Let's see if they can sustain this pump or if it's mainly a pump and dump. But they now added Ansem IIO, which I guess is kind of like Pump.fun. The more ANSM coins you burn, the better it is for your coin on this website.
Now, something I need to tell their dev is that the pictures don't work. So whoever Ansem hired to be the dev — it's not good. You see, for example, if you go to Bulmania AI, you see the pictures here, they all work. It's because we have good dev. We have very good dev. We're developing on the highest level — internationally highest level, award-winning dev team. If you look at Ansem's website, there are no pictures. All pictures are broken because the dev — maybe junior, maybe it's AI slop, maybe something else — but no pictures load.
Now they also have this index. Basically, if you launch your coin on Ansem IIO and you burn enough ANSM coins, you're going to get into this index. Interesting stuff. I love overall what Ansem is doing. I love this index. The more you burn, you're going to get into an index so you can maybe recoup your expense. So it is an expense to burn coin. You want to be included in this index so you can dump the hell out of your shitcoin on the holders of the index.
I mean, I have to be cynical. With shitcoins and memecoins, listen — no one cares about tech. Everyone is here to make money and make money from you. When it comes to memecoins, it's PvP. It's wilderness. It's not "let's build something, grow the cake." No, man. Memecoin is PvP. Which is also the fun of it. You create a coin, other people buy the coin. It's PvP. All memecoin is PvP.
So I have to be maximally cynical. If the system is that you have this index and you have to burn ANSM coin to be in this index, I need to recoup my money somehow, and it's going to be by dumping. Look here — Z500 is the first on-chain index. "We have built a protocol that allows teams to easily airdrop token supply to ANSM holders and buy and burn ANSM to signal alignment. My replies are constantly filled with people and teams trying to get attention."
Yeah, so maybe there is a good system here where if I am a memecoin creator, I want to grow the pie. Maybe if I stay in the index longer, it's going to be even better. But at the end of the day, it is fugazi memecoins, and Ansem is doing a good job building utility around his memecoin. But all of this — 30,000 launches per day — they have one goal: max extract. So you're going to do an index with this max extracting. Let's see.
Now, a few of these memes, obviously, are going to be the next Dog Wif Hat. Our job is to find them. What is the next Dog Wif Hat? What is the next PEPE? A few of them will be. But again, it's 30,000 per day being created, and maybe three per bull market are going somewhere.
He's going to promote your coin if you burn enough ANSM coin. The numbers are interesting, but the bigger thing I'm watching is the flywheel — 600 projects launched on ANSM, $1.6 billion airdrop to holders, $919 million in volume, 931,000 ANSM burned. What started with teams trying to get Ansem's attention is turning into a real coordination layer. Teams get access to distribution, holders get exposure.
But at the same time, if I have ANSM and you try to launch some kind of coin and then you dump it, you still burned my ANSM. So I guess for ANSM holders, it's fine.
The Democratization of Financial Products in Crypto
Anyway, look here. This is from Imran from Alliance DAO — they're kind of like the Y Combinator of crypto. He's saying: "The reason the crypto trenches feel so foreign and hated by most people is historically we've lived inside permissioned financial economies. Almost every financial product is regulated and geo-constrained and shaped by banks and governments deciding what spectrum of risk should be available to citizens. Crypto breaks that model and it effectively democratizes the creation of all types of financial products."
Correct. Correct. You can also max extract. Correct. "Every point on the risk curve can now exist globally and be accessed almost instantly. And given that the trenches are likely a much better internet-native product than regulated lottery tickets, binary options, crash games, or slot machines — always on, globally liquid, social and interactive markets."
Yeah, basically it's better. What's his point? "My take is crypto won't just recreate existing finance but will continue to create new things." It's true. I mean, I could have told you that as well. That's true. We know it. Crypto is creating new products. We know it.
"Farcaster was a great infra app experiment, but it's clear that the decentralized social graph itself isn't the value prop that pulls users away from Twitter." True. Farcaster was very bad for ETH because all the ETH maxis moved to Farcaster for ideological reasons. No one was left to shill ETH on Twitter, and then Solana became big. So for Solana, Farcaster was great. Now Farcaster is dead or something. No one cares.
"The behavior is social trading — that turns discovery of new tokens, speculation, and P&L as reputation into one native product loop. And Twitter is at the core of that." That's why Bulmania AI is highly integrated with Twitter. Everything that is being said on Twitter about your bags, you get access to as soon as possible. What are the top voices saying — you can ask and so on and so forth.
Q&A: Open Source vs. Closed Source for Hardware Wallets
Let's go to Q&A — questions, answers, debates, discussions. Big shout out to Guzman for timestamping us today.
Another day sideways, but another day with news. Things are sideways. It's not going to continue forever. At some point we're going to see the beautiful big Valhalla.
On PvP investing: All investments are PvP? No, not necessarily. You look at investments that grow the pie — Bitcoin, Solana — things where you have something new being created, some new use case, some new tech where you are early and it's still growing and still unexplored. Then it's not PvP. Bitcoin, for example, overall, if you have a long time horizon, it's not PvP. The stock market, for example, is not PvP either, because the stock market on average grows 10% per year before inflation and like 8% per year after inflation. That's companies getting better, more efficient, better tech, and so on. So I wouldn't agree there. But memecoins, which have no use case and it's just a short-term one-week life cycle — that's PvP. It's not growing anything.
On YubiKey: What the hell? YubiKey is also compromised? No way. Let me ask Bulmania AI. I mean, everything is compromising. AI tools are so good at finding vulnerabilities. You see the increase in hacks related to hardware stuff. Before AI, I guess it was too hard to find, but now it's massive — all of the issues are found, which I guess is also good because the products become better. But the cost is that someone's going to get wrecked.
On open-sourcing cold wallet code: Why even open source the code for cold wallets at this point? AI will wreck it. Yeah, it's a good question. Previously, open source was good because many researchers can check it, many researchers can collaborate on improving it. But now — yeah, I think it's a good question. Should you really have open source? Because all AI models can find some issue with it, and it's so easy now to run a model to find exactly where the vulnerability is.
Let me pull up the latest discussions here with AI as well. Are there more discussions about not open-sourcing critical code, for example in hardware wallets?
So, YubiKey itself was not compromised. Keys stayed on hardware. But what actually happened is a Windows logging flaw that let attackers replay. A Spectrum Ops researcher, Michael Grafnet, demonstrated that Windows event logs were writing full WebAuthn assertions. A low-privileged user who could read the event log could copy that assertion and replay it — full account takeover. No password, no phishing, no private key theft. Not good. Not good at all. So guys, if you have YubiKey, be careful. Guzman, your reputation is cleared — it was not FUD. It is correct. Full account takeover.
On homomorphic encryption: Bulmania AI agrees that homomorphic encryption is shaping up to be one of the most important privacy primitives for the next phase of blockchain. It directly attacks the core paradox of public chains — everything is transparent by design, which blocks real institutional money. So you have this — fully homomorphic encryption and tech. If you're interested, check this out.
One of few technologies that can deliver programmable privacy without destroying composability. Yeah, cool stuff. But I don't like these separate coins that are doing some stuff. This needs to be in ETH. This needs to be in Solana. The big chains need to implement it. If you come with your own L1 and you have some privacy and no one cares, it's going to be tough. You can make it work, but you need to come with use cases. For example, Hyperliquid — they did their own blockchain, they came with a use case, they built a nice app. If you have your own L1 and it has privacy, no one cares, because privacy is not a use case in itself. You need to have ecosystem apps. And then people want to become rich, and if they want privacy, you have Zcash. So there needs to be a workflow.
There needs to be a path from: I become rich in the memecoin — how do I go to your privacy whatever — and why not just use Zcash? Because with NEAR Intents you become rich with shitcoins on Solana, you can go to NEAR Intents to Zcash. So they need to see — this is the problem — from the product description to reality, how to get it into the hands of users. Normally doing your own L1 or whatever is very hard. Only a few really good executors, really good entrepreneurs can make it work. Only very, very few.
Back to the open source debate: Speaking about open source — just a few years ago, if someone said "don't open source because it's going to get hacked more," this would be ridiculous. Normally you would have the opposite — you open source so you ensure that people have attention on it. But now with AI, it's a very big discussion.
The conversation is active right now and it sharpened this week around fresh hardware wallet incidents. The core is simple: open source lets anyone audit the code, but AI now lets anyone hunt bugs across every public implementation, often faster than vendors can patch it. Previously, you would have some guy finding the vulnerability, some guy doing responsible disclosure, then the company patches — it's such a long process. Now I can have 100 different models — the Chinese model, the Western models, all the different versions — all of them reading your code trying to find vulnerabilities in real time. How are you going to defend that? It's so tough.
At the same time, if you are closed source now, you may have even more vulnerabilities because no one is looking at your code. You do crap, no one looks at your crap.
Security firm reports a critical bug in a major crypto key storage device. Under the right conditions, a user could approve what looked like a correct transaction. They withheld the vendor and technicals for responsible disclosure, but that post drew a direct AI error warning — the kind of disclosure that needs to die. This description plus AI applied to all non-patched implementations can result in parallel discovery of the bug before responsible disclosure.
Why AI tilts the old open-source argument: several voices are saying the same structural shift — discovery is becoming cheaper than defense. Once models can uncover bugs faster than teams can ship patches, the bottleneck is no longer who finds it first. It's who survives the speed of discovery. As one person puts it clearly: "The scary part is not that AI finds vulnerabilities — it's that discovery may soon outrun the ability to fix them. Open code gives AI a free, complete map. Closed or partially closed code removes the map." That is the modern version of the old security through obscurity. And some people are newly willing to defend the obscurity side.
Normally, security through obscurity is the noob move. You are a noob if you try to do security through obscurity. But now with AI, security through obscurity is becoming more central. Look at what happened with ColdCard — the code was completely open source, yet a serious bug still went unnoticed for years. Ledger is the opposite extreme. There could theoretically be hundreds of bugs buried in NDA-protected code that the public never sees, but attackers don't get a free road map. You can read more here if you are interested.
On the Ledger necklace: Having both Ledger and the recovery key puts you at double risk when traveling. Yeah, don't travel with your Ledger. I hope you don't have that Ledger thing where you hang it around your neck. That's when I realized that Ledger doesn't really understand crypto — when they did that product where you can buy a Ledger which is like a necklace. I don't understand how you would make a hardware wallet into a necklace. It's zero operational security awareness, zero crypto awareness. I can just imagine someone they hire who doesn't know crypto, and everyone just pretends it's good. Guys, if someone in your company says something dumb, you should say it's dumb. Don't say dumb things. The feedback is: it's dumb. Okay. So now you know. It's fully respectful. Nothing to be worried about. Someone says something dumb, you say it's dumb. That's it. Now they know. Especially for crypto, it's very important. You need to be super clear about what's happening.