Cryptocurrency and Blockchain

Bitcoin jumped 23% to nearly $79,000 this week after the U.S. Treasury announced it would at least double its long-dated bond buybacks, from $2 billion to $4 billion per operation, running September 9 through November 4. The Treasury is not printing new money—it is selling short-term debt to buy back older, less-liquid 10- to 30-year bonds, a move analysts likened to Operation Twist 2.0. The announcement sent long-dated yields lower by as much as 10 basis points, the 10-year yield fell sharply, and the dollar weakened, all conditions that reduce the opportunity cost of holding a non-yielding asset like Bitcoin. Standard Chartered analyst Geoff Kendrick said Bitcoin could reach $100,000 by year-end if it holds above the technical level of $65,500, which it has now cleared. The move triggered a short squeeze: roughly $1.4 billion in crypto short positions were liquidated in four hours, with significantly less of that in Bitcoin alone, amplifying the rally. Ether surged significantly to above $2,400 in the same period, posting a 20% weekly gain. The Treasury's buyback program is designed to smooth liquidity in an illiquid corner of the bond market—off-the-run securities account for a small portion of the Treasury market but generate a substantial share of daily trading volume—not to deliver monetary stimulus, but traders read it as a signal of policy support for risk assets.

Coldcard released firmware 5.6.1 three weeks after a seed-generation flaw enabled attackers to steal $114 million in bitcoin from hardware wallet users. The update mandates that all newly generated seeds include user-supplied randomness—at least 65 unpredictable key presses, 50 dice rolls, or 128 coin flips—combined with fresh entropy from the device's hardware random-number generator and secure elements. The company replaced its backup RNG algorithm entirely, swapping Yasmarang for one built on SHA-256. Beyond seed generation, the firmware adds transaction re-verification immediately before signing to block USB-based tampering, restricts USB data transfers to encrypted sessions, blocks certain signature modes that leave transaction outputs modifiable, and strengthens hardware RNG self-testing and firmware validation. Coinkite used AI tools, including frontier models like Kimi, to audit the entire system during the three-week review, uncovering problems in transaction approval, USB handling, and firmware updates unrelated to the original bug. The critical limitation: the update does not repair seeds already generated on vulnerable firmware versions. Users whose seeds were created between 2021 and July 2026 on affected Mk2, Mk3, Mk4, or Mk5 devices must generate entirely new seeds and migrate their funds; importing old seed words into updated firmware preserves the weakness because the underlying seed remains unchanged. Coldcard has launched a public security status page and continues supporting customers migrating funds while authorities investigate the thefts.

Tether abandoned a $120 million Bitcoin mining operation in Uruguay after the state utility UTE disconnected power to two facilities in July 2025, ending a dispute over electricity allocations that had crippled operations for months. Tether's local entity, Microfin, had invested roughly $60 million in each of the two sites in Florida department, launched in 2023 as the company's entry point for South American mining expansion. The core disagreement was contractual: Tether interpreted its power allocation as a minimum that could be increased; UTE read it as a hard ceiling. As mining demand grew, the sites sometimes lacked enough electricity to operate for days. When Uruguay's new left-leaning government took office in March 2025 and appointed new UTE directors, the utility hardened its negotiating stance. Microfin stopped paying electricity bills in June, informed UTE it would terminate contracts, and failed to attend a scheduled signing of a revised agreement. UTE cut power on July 25 after roughly $5 million in unpaid bills accumulated; Microfin settled the debt in December but never restarted operations. The company laid off 30 of 38 employees and informed labor authorities it would cease local operations. Uruguay had been positioned as a testing ground before expansion into Brazil, Paraguay, and Argentina, but rising electricity costs and reduced Bitcoin block rewards after April 2024's halving have dimmed the economics of mining there. Tether continues investing in mining and renewable energy projects in Brazil.