Bitcoin experienced a decline, dropping to around $76,000, though hackers returned a significant portion of the approximately 4,000 BTC stolen from the Liquid Network. Meanwhile, the Ethereum Foundation has identified key EIPs for the upcoming Hegota upgrade, alongside other notable events from the past week.

Expectations for Increased Demand

At the beginning of the week, Bitcoin fell below the $80,000 mark. Analysts pointed to weak demand and a shift among long-term holders towards distributing their assets as contributing factors to this price movement.

Hourly chart of BTC/USD on Binance. Source: TradingView.

On September 11, following the release of inflation data from the U.S., Bitcoin's price sharply dropped to $76,000. However, the asset quickly rebounded and made a brief attempt to retest the $80,000 level.

As the weekend approached, Bitcoin traded sideways, with Glassnode and CryptoQuant indicating significant resistance levels above which sustained growth would be unlikely.   

At the time of writing, Bitcoin was holding around $77,000, marking a weekly loss of approximately 3.4%. Ethereum maintained its position near $2,500, while TRON's price increased by nearly 2%.

Source: CoinMarketCap.

Other altcoins in the top ten by market capitalization experienced deeper corrections than Bitcoin. HYPE from Hyperliquid plummeted by 12.2%, while Zcash and Solana fell by 6.5% and 5.6%, respectively.

After three weeks of continuous inflows, Bitcoin spot ETFs saw an outflow of nearly $463 million. This capital outflow and price decline pushed the total assets in these products below $100 billion, down to $97 billion.

Source: SoSoValue.

In contrast, Ethereum funds continued to attract investments for the fourth consecutive week, with inflows exceeding $197 million. The assets under management (AUM) for these products rose to $16.3 billion, a level last seen in January.

Source: SoSoValue.

The cryptocurrency fear and greed index dropped from 73 to 61 points, remaining in the positive sentiment zone for investors, although it approached the lower boundary.

Source: Alternative.me.

The total market capitalization of digital assets fell from $2.7 trillion to $2.63 trillion. Bitcoin's dominance now stands at 58.8% (down from 59.6% the previous week), while Ethereum’s share increased to 11.6% (up from 11.1%).

Hackers Withdraw Bitcoin from Liquid Network, Returning ~85% of Stolen Coins

On September 6, unknown attackers withdrew approximately 4,000 BTC valued at around $320 million from a wallet on the Liquid Network, marking the largest hack in the Bitcoin ecosystem in recent years.

The hackers exploited a software vulnerability in Liquid to create L-BTC tokens without corresponding Bitcoin reserves. They then exchanged these tokens for Bitcoin via SideSwap. 

The individuals behind the hack claimed to be white hat hackers and left a message in a related transaction:

"We are white hat hackers. Contact us via blockchain."

Later, the hackers expressed their intention to return "the majority" of the funds after the vulnerability was addressed.

"Once the fix is confirmed, we will return the funds," one message stated.

In response to the incident, developers shut down bridge nodes and halted new transactions, also notifying exchanges to suspend the deposit and withdrawal of L-BTC. According to the Liquid team, other assets on the network, such as USDT, DePix, and several RWA, were unaffected by the hack.

By September 8, the hackers had returned 3,400 BTC of the approximately 4,000 BTC stolen from the federation’s wallet.

They retained around 598 BTC, valued at about $47 million, which constitutes roughly 15% of the total amount. Both parties refrained from publicly commenting on the fate of these assets for some time, but on September 11, Blockstream, the company behind Liquid, announced it would not pay for the return of the stolen bitcoins. The team labeled the retention of the coins as theft and promised to involve law enforcement, exchanges, and blockchain investigation specialists to locate the perpetrators.

Topics for Discussion with Friends

  • Opinion: Military conflicts have accelerated cryptocurrency adoption in the Middle East.
  • Ledger and Trezor called for coordinated vulnerability disclosure to become an industry norm.
  • A former developer at Anthropic accused AI corporations of posing a threat to humanity.
  • OpenAI requested Congress to clarify the legality of collaborative AI slowdown efforts.

Hacken Identifies Critical Risk in Management of 91 Billion USDT

Approximately 91.3 billion USDT on the TRON network — about half of the stablecoin's market supply — is managed by a contract that could be compromised if two key signatures are breached, according to findings by Hacken.

This risk is associated with an administrative multisig that governs the USDT contract, allowing for token issuance, address freezing, and reassigning ownership of the contract.

Hacken emphasized that no signs of key compromise or prior incidents were detected. The firm also noted that Tether utilizes the same six keys across Ethereum, Avalanche, and Celo, meaning that compromising two reused keys could potentially affect other stablecoin deployments.

Additionally, auditors pointed out that the USDT smart contracts lack automated reserve verification and issuance limits: if signers approve a transaction, the contract can create any volume of tokens without confirming a corresponding bank deposit on-chain.

IonQ Estimates Quantum Computer Power Required to Attack Bitcoin

A fault-tolerant quantum computer with approximately 20,000 physical qubits would need 26 days to break the cryptography on secp256k1, according to estimates from IonQ.

Researchers conducted a comprehensive evaluation of the resources needed to implement Shor's algorithm against secp256k1 — the elliptic curve used in Bitcoin and other cryptographic systems.

According to their calculations, solving the discrete logarithm problem would require 19,397 physical qubits, 1,457 logical qubits, and around 39 million Toffoli logical gates. With this setup, a single computation attempt would take approximately 25.7 days.

IonQ claims to have presented such evaluations for the first time at the level of a specific quantum computer architecture, taking into account not only the algorithm but also the compiler, hardware architecture, and error correction system.

Also on ForkLog: 

  • Hackers targeted Trezor customers through a compromised mailing service.
  • Arm has united 80 companies to establish a common standard for robot capabilities.
  • LayerZero and a16z unveiled a post-quantum proof system for blockchains.
  • Republicans updated the CLARITY Act ahead of the Senate vote.

Ethereum Foundation Identifies Two Key EIPs for Hegota

On September 7, the Ethereum Foundation's Protocol Cluster published priorities for the Hegota upgrade. Out of 62 improvement proposals (EIPs), two received the highest S level, or must-ship designation: FOCIL (EIP-7805) and Frame Transactions (EIP-8141).

Simultaneously, developers confirmed the goal of making the base layer of Ethereum resilient against quantum attacks at the execution, consensus, and data levels by December 2029.

At the consensus level, the primary proposal will be FOCIL (Fork-Choice Enforced Inclusion Lists). A committee of several validators will compile transaction lists for inclusion. The block creator must incorporate the specified operations according to established criteria; otherwise, the validating attesters will not support the block.

This mechanism aims to enhance Ethereum's resistance to censorship and complicate scenarios where a single dominant builder blocks individual transactions.

At the execution level, the must-ship status was granted to EIP-8141 Frame Transactions. This proposal integrates account abstraction directly into the protocol, enabling programmable account verification, transaction execution, and gas payment.

For the post-quantum transition, the cryptographic flexibility of Frame Transactions is crucial. Accounts will be able to transition to new signature schemes without requiring a separate hard fork for each algorithm. In the long run, this should facilitate the phasing out of secp256k1 keys, which are vulnerable to quantum computers.

Further Reading

We explored the mechanisms behind the emergence of "social media telepathy" and found the reality to be both more mundane and alarming than one might think.

We discussed whether people are ready to give AI the authority to manage money and how the world is regulating the new economy of agents — from the most daring to the most conservative approaches.

In the final installment of the "Quantum & After" series, we examined where quantum technologies are already operational as tools and where commercial benefits remain promises.

We compiled the most significant events in cybersecurity over the past week in our traditional digest.