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Early altseason signs emerge as altcoins begin to show bullish signs

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Crypto market analysts say increasing altcoin performance and volumes on Binance, a rising altseason index and a strengthening TOTAL2 macro structure are early signs that the market could enter an altseason in 2026.

Key takeaways:

  • Altcoin recovery signals emerge, hinting at a potential altseason in 2026.
  • Rising altcoin trading volume on centralized exchanges and AltSeason Index point to possible capital rotation from Bitcoin.
  • Altcoin market cap chart shows improving technicals.

Altcoin market shows early signs of recovery

Crypto analyst Darkfost said that macroeconomic uncertainties surrounding the ongoing US and Israel-Iran war saw the altcoin sector correct by more than 50%.

However, the sector appears to be quietly “awakening” as the percentage of altcoins on Binance trading above their 200-day moving average (MA) increased to 21%, levels last seen in September 2025, suggesting that “investor interest in altcoins appears to be gradually returning,” Darkfost said in a Quicktake note on Wednesday, adding:

“This represents a crucial indicator for those looking to gain exposure.”

Performance of altcoins on Binance. Source: CryptoQuant

Darkfost cautioned that it’s still too early to call for an altseason as the metric remains below the levels seen in mid-2025 and Q4 2024, when most altcoins traded between 60-80% above their 200-day MA. 

Meanwhile, fellow analyst CryptoOnchain pointed to rising activity on centralized exchanges (CEX) as another sign of increasing momentum in altcoins. 

According to the analyst, altcoin trading volume, excluding the five largest cryptocurrencies, has increased steadily over the past few weeks. The chart below shows the appearance of an Altcoin Volume Increasing Trend (yellow bars), which occurred when the 30-day MA for altcoin trading volume crossed above its 365-day MA.

Historically, when this metric flashes yellow, “it signals a clear rotation of capital from major caps into mid and low-cap altcoins,” the analyst said, adding:

“If this momentum is sustained, it could serve as a strong confirmation that a broader altcoin rally is underway.” 

CEX volume ratio vs. Top 5 crypto. Source: CryptoQuant

Altcoin  season “approaching”

The 90-day AltSeason Index also climbed to 28.6, its highest level in months. The index tracks whether a majority of altcoins outperform Bitcoin over the last 90 days. 

“The altseason is starting quietly,” CryptoQuant analyst CW8900 said in a recent Quicktake note, referring to the “rapid rise” in the index over the last few weeks, adding:

“The real AltSeason is approaching.”

Altcoin season index. Source: CryptoQuant

Although the index has been recovering, its value of 28.6 means only 28.6% of the top 50 cryptocurrencies by market capitalization have outperformed Bitcoin over the last 90 days. This falls short of the 75% “altseason” threshold, according to Blockchaincenter.

These include ZCash (ZEC), Bittensor (TAO) and Morphor (MORPHOR), which are up 98%, 72% and 68% over the last three months, compared to Bitcoin’s (BTC) 17% gains. 

Top 50 Performance over the 90 days. Source: Blockchaincenter

CW8900 added:

“The indicator also shows that there was no real AltSeason in this cycle. The period when the AltSeason Index reached its highest point was early 2024, and even that value was relatively low compared to previous AltSeasons.”

Altcoins show signs of bottoming out

Data from TradingView showed TOTAL2 — the cumulative market capitalization of all cryptocurrencies except Bitcoin — bouncing off the lower trend line of a multi-year broadening wedge that has defined its price action since mid-2022. 

In a Wednesday post on X, analyst cryptocupra said TOTAL2’s breakout could mirror the 2021 breakout and rise as high as $8 trillion, adding that “altseason is inevitable.”

Altcoins market cap, TOTAL3. Source: X/1000xgirl

Nebraskangooner’s chart showed TOTAL2 breaking above the upper boundary of an ascending triangle on the daily time frame.

TOTAL2 is “breaking out from this bottoming pattern, the analyst said in a recent X post, adding:

“Altcoin market primed for more upside as long as this breakout holds.”

TOTAL2 daily chart. Source: X/Nebraskangooner

Fellow crypto analyst GorkemCrypto also shared a bullish argument with a 2021 fractal that projects Bitcoin dominance falling to 40% as capital rotates into altcoins.

Bitcoin dominance. Source: X/GorkemCrypto

However, as Cointelegraph reported, the Bitcoin Dominance Index has climbed to its highest level since November 2025. BTC dominance has been climbing since 2023, suggesting that the current trend still favors BTC over altcoins.

Ether Struggles Below $2.4K As Spot ETH ETF Demand Slumps

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Ether (ETH) has tested the $2,400 resistance five times over the past month, with each breakout attempt losing momentum near that level. The stalled price action comes as spot Ether exchange-traded funds (ETFs) recorded just $500 million in inflows since March. Ether reserves on Binance exchange climbed by 400,000 ETH, and ETH futures traders also reduced leverage exposure over the past week.

Weak spot ETF demand limits upside

Spot Bitcoin ETFs attracted roughly $4.5 billion in net inflows since March, supporting BTC’s move above $82,000. Ether ETFs recorded only $500 million in inflows during the same time period, leaving ETH without the same level of institutional buying pressure.

That demand gap matters because Ether has repeatedly tested the same resistance zone without fresh spot demand entering the market. 

Spot ETH ETF net inflows. Source: SoSoValue

Crypto analyst Darkfost noted that ETH futures activity initially supported the recovery. Ethereum open interest increased by $4.5 billion during its 33% recovery from the February low of $1,736, indicating that traders aggressively added positions as the price rallied. 

Binance’s estimated leverage ratio also rose to 0.76 on March 16, one of the platform’s highest readings this year, signaling that traders were using more borrowed capital to increase futures exposure. 

The leverage trend has since reversed near the resistance level. Binance’s estimated leverage ratio dropped to 0.57 on Sunday. The analyst explained that long positions opened ahead of a breakout were closed after ETH slipped back below $2,350.

Ether: estimated leverage ratio on Binance. Source: CryptoQuant

Lower leverage reduces the possibility of sharp liquidations driving the price higher. Darkfost added, 

“This is not necessarily a bearish signal. Lower leverage tends to stabilize the market, especially as ETH attempts to break out of its range. Now, for a breakout to materialize, spot demand will need to take over.”

Related: Veteran investor bets on Ethereum as AI agents drive tokenization demand

Ether inflows to Binance raise supply pressure 

Market analyst Rei noted a sharp increase in Binance ETH reserves in May. According to the analyst, Binance reserves rose to 3.8 million from 3.4 million ETH. Meanwhile, the total exchange inflows on Binance peaked at 771,689 ETH on Sunday. 

Ether exchange reserve on Binance. Source: CryptoQuant

This is the highest level of exchange inflows since Feb. 6, when 1.1 million ETH were recorded on Binance. The ETH deposits arrived while ETH traded around $2,330, consolidating in a tight range between $2,400 and $2,250 since April 14.

Ether exchange inflow. Source: CryptoQuant

The analyst said that large exchange inflows may coincide with traders preparing new positions or taking profits during the price rebound. The added liquidity increases the available supply near the resistance and puts greater pressure on ETH buyers attempting to reclaim $2,400.

For ETH bulls, the immediate task remains turning $2,400 from resistance into support. Without stronger spot demand or a reduction in exchange-side supply, that zone may continue to cap rallies in the near term.

Related: Ether down 35% versus Bitcoin in a year: Will the ETH price downtrend continue?

One in four U.S. adults now use Crypto

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New study reveals Americans increasingly use crypto in their daily routine for payments, financial management and charitable giving.

Today, the National Cryptocurrency Association (NCA), a non-profit organization dedicated to helping Americans better understand and use crypto, released its 2026 State of Crypto Holders Report. The second annual report shows continued growth in crypto adoption, with over 67 million Americans now owning crypto, an increase of 12 million from 2025.

The study, conducted with The Harris Poll, surveyed 10,000 U.S. cryptocurrency holders and builds on insights from the NCA’s 2025 State of Crypto Holders Report. This year’s findings show that crypto is becoming a routine part of Americans’ financial lives, from sending money to family and friends to paying for goods and services in-stores and online. As more holders explore the utility of crypto beyond investing, nearly two-thirds (63%) report greater interest in the tool this year compared to 2025.

Beyond national crypto adoption, the NCA has also collected data detailing the number of crypto holders in each state and district.

“Crypto is an increasing part of the lives of everyday Americans who are using it to save, spend, donate, and power their businesses” said Stuart Alderoty, President of the NCA. “Last year we found one in five U.S. adults were holding crypto, and now it’s up to one in four. And they come from all walks of life, spanning regions, genders, incomes, political party lines and beyond.”

The Changing Face of Crypto
New crypto holders are much more diverse than early adopters.

  • Gender: Female crypto ownership is on the rise, up 10% since last year. Zooming out further, those who joined the crypto economy in 2025-2026 are more likely to be female (42%) compared to earlier adopters who joined before 2025 (34%).
  • Income: Crypto ownership is not concentrated to the wealthiest as 90% of holders make less than $500,000 per year, and nearly a quarter (23%) make $75,000 or less per year.
  • Career: Today’s holders are just as likely to work in construction and manufacturing (21%), second only to the combined share of those working in tech and financial services (26%).
  • Age: The age distribution also widened at both ends, with more Gen Z, Gen X, Boomer and Silent Generation holders compared to previous years.
Generation Adoption Breakdown 2009 – 2024 2025 – 2026
Gen Z 24% 29%
Millennials 49% 30%
Gen X 21% 26%
Baby Boomers 6% 13%
Silent Generation 0% 1%

Practical Use Cases Are on the Rise
Holders are using their crypto instead of just holding it for investment, with four in ten reporting that they send crypto to family or friends, and pay with crypto for goods and services. They think of crypto simultaneously as an investment, payment method, and a technology. Nearly one in three accept crypto payments for their businesses, buy and sell NFTs, and play games that incorporate crypto. Charitable giving is emerging as a popular use case as well, with 19% of holders making donations via crypto.

Benefits Extend Beyond Finance
By increasingly offering new ways to save, send, and spend with crypto holders are feeling positive about crypto. When asked how crypto makes them feel about their financial lives, 83% said proud, 81% said confident, and 78% said empowered.

Holders report that they trust crypto because of 24/7 accessibility (55%), privacy (43%), financial control (40%), and positive personal experiences (40%). In fact, holders trust crypto (69%) slightly more than they trust traditional banking (65%).

Crypto’s Positive Impact on Life 2025 2026
Increased their financial independence 49% 54%
Learning and personal growth 45% 51%
Fun and excitement 45% 50%
Feeling of security and control 35% 42%

Confidence is Growing
Hands-on experience has improved holders’ perception of, and confidence in, crypto. Three-quarters (75%) see it as proven and reliable, while over two-thirds (69%) see it as established and mature. Within the next year, 90% plan to buy more crypto, 72% plan to spend more crypto, 65% plan to send crypto to friends or family, and 50% plan to donate some crypto.

“Crypto is shifting from novel to normal, especially as it integrates with institutions like retailers and banks,” said Ali Tager, VP of External Affairs at NCA. “Two-thirds (63%) of holders believe that crypto is already integrated into traditional financial systems, while nearly one-third (30%) want to see even broader crypto adoption by merchants for payments.”

Looking ahead, 85% expect more people will use crypto within the next five years, but there is still an opportunity to increase engagement with current holders: 40% want to earn rewards and interest for transacting or using their crypto, while about a third want more:

  • Opportunities to pay with crypto at checkout for purchases like groceries (35%)
  • Personal knowledge about crypto (35%)
  • Market stability / less volatility (34%)
  • Smart regulation and oversight (32%)
  • Robust security features and anti-theft guarantees (31%)

As millions of Americans embrace crypto for the first time, the NCA is continuing to provide trusted learning resources to help them navigate the tool safely and responsibly, including by partnering with Coinbase and Operation HOPE to close the crypto knowledge gap and empower communities around the country.

Millionaire Samuel Leeds Went to Hyde Park and Tried to Give Away a House, a £126,000 Range Rover, and £1,000 Cash, Nobody Would Take Them

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Samuel Leeds spent an afternoon in one of London’s busiest parks offering free property, a luxury car, and hard cash to strangers. The results say everything about why most people never build wealth. On a busy afternoon in Hyde Park, London, Samuel Leeds, a millionaire property investor worth over £10 million, approached stranger after stranger with an unusual offer.

In one hand: a mystery box containing £1,000 in cash and the keys to a £126,000 Range Rover Autobiography. In the other, a legally binding contract transferring ownership of a house worth approximately £60,000.

All he wanted in return was £50 for the mystery box. Or £20. Or £10. Or £5. The house he was offering for free.

By the end of the afternoon, almost nobody had taken him up on it.

The Experiment

Leeds is no stranger to testing human psychology around money. Having built his fortune from nothing, buying his first property at 17 with no qualifications and no family wealth behind him, he has spent years teaching others to do the same. And he has spent just as long trying to understand why so many people, given every opportunity, still don’t.

The Hyde Park experiment was designed to find out.

The mystery box was real. The £1,000 cash was real. The Range Rover keys were real. The house contract was real, a genuine lease option agreement legally sound, transferring a property Leeds owned to whoever was willing to sign.

Passers-by were approached one by one. The pitch was simple: here is a box, something valuable is inside, and all I want is £50.

The responses were almost uniformly the same. 

No, thank you. I’m not sure. What’s the catch? I don’t have change.

One man was on the verge of buying when his friends were urging him to do it, but he hesitated at the last moment and walked away. Leeds showed him what was in the box. The man stared at the £1,000 cash and the car keys in silence.

“The idea of losing £20 was enough to stop him,” Leeds said. “That’s what fear of loss does to people. It costs them everything.”

The House Nobody Wanted

The car and the cash were one thing. The house was another.

Leeds approached couples, groups, and individuals holding out the contract and explaining clearly that the property was his, that they could take as long as they needed, that they could have a solicitor review it, and that there was no trick and no catch. The house was genuinely available. All they had to do was sign.

“Every single person said no,” Leeds said. “I was standing in one of the most expensive cities in the world, offering a free house to people who almost certainly couldn’t afford to buy one. And they walked away.”

The reactions ranged from polite refusal to outright suspicion. Several people assumed it was a prank. Others said they didn’t understand the contract. One group engaged for several minutes before concluding they simply couldn’t be bothered to read it.

“Someone said, ‘If it wasn’t on camera, I might believe it,’” Leeds recalled. “The camera was the problem for them. Not the contract. Not the house. The camera.”

What It Proved

Leeds does not tell this story to mock the people who said no. He tells it because he believes it illustrates something fundamental about the psychology of wealth and the psychology of poverty.

“The number one reason people don’t build wealth is not lack of opportunity,” he said. “It’s a mindset. It’s the inability to take a calculated risk. It’s the fear of looking stupid, of being wrong, of losing a small amount in pursuit of a large gain.”

He has seen the same pattern throughout his career. People who attend his property training learn the strategies and understand the numbers and then do nothing because taking action feels too exposed, too uncertain, or too risky. 

“I offered people a free house in Hyde Park, and they said no,” he said. “And then those same people will tell you the reason they haven’t got into property is that they don’t have enough money or they don’t have enough opportunity. The opportunity was right there.”

The Deeper Point

Leeds is careful to separate the psychology from the judgment. He grew up with nothing. He knows what it feels like to be risk-averse when you have very little to lose, and everything feels fragile.

But he also knows what it took to get past it.

“When I was 17, I went to a property networking event in a £34 suit from Asda and hid behind a pillar because I was too scared to talk to anyone,” he said. “I know what fear feels like. But at some point, you have to decide that the fear of staying where you are is bigger than the fear of taking a chance.”

The house in Hyde Park went unsigned. The Range Rover keys went unclaimed. The £1,000 cash went back in the box.

For Leeds, the afternoon was not a failure. It was a lesson he has since shared with hundreds of thousands of people on YouTube, where the video has accumulated significant views and sparked a conversation about the invisible barriers that keep people from building wealth.

“The opportunity was real,” he said. “It always is. The question is never whether the opportunity exists. The question is whether you’re ready to take it.”

Samuel Leeds is the founder of the Samuel Leeds Academy and Samuel Leeds Finance. He holds property across the United Kingdom, the UAE, Africa, and the United States.

Moody’s puts AAA rating stamp on Fidelity and BlackRock’s tokenized money market funds

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Moody’s assigned its highest credit rating to tokenized money market funds from Fidelity and BlackRock, validating their safety as yield-bearing onchain products.

The AAA-mf rating signals an extremely strong ability to ensure high liquidity and capital preservation and the lowest level of risk.

Fidelity’s FILQ fund debuted on May 6. The product is powered by Swiss digital asset bank Sygnum’s Desygnate tokenization platform, which enables onchain fund registries, smart contract-based settlement and stablecoin subscriptions and redemptions.

It also includes infrastructure support from JPMorgan Chase for custody and fund administration, Apex Group for transfer agency services and Chainlink, which publishes the fund’s net asset value and distribution data onchain.

“There is no tokenized finance without tokenized liquidity. Once markets settle in real time, cash must settle in real time too,” Emma Pecenicic, head of digital assets distribution at Fidelity International, said in a statement.

BlackRock’s BUIDL, introduced in March 2024, is one of the largest tokenized Treasury funds in the world. The fund received a AAA rating yesterday, more than two years after its debut, according to a post on X by Securitize, its transfer agent and tokenization platform.

Money market funds deal in high-liquidity, short-term debt securities with maturities generally under one year, such as Treasury bills, commercial paper, and certificates of deposit. Investors use money market funds as a safe place to park cash while still earning some interest.

Tokenized U.S. government debt products, including Treasury bills, notes, bonds and money market funds, have rapidly gained traction among both traditional financial institutions and crypto-native firms.

The onchain tokenized Treasury sector now has total assets under management of over $15 billion, up from $1 billion in just two years, according to data source rwa.xyz. The growth is driven by demand for onchain versions of low-risk, yield-bearing instruments.

Bhutan Transfers $8 Million In Bitcoin Amid Ongoing Bitcoin Liquidation

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Bhutan could walk away with roughly $767 million in total profit if it sells its remaining Bitcoin near current prices — a striking figure for a Himalayan nation of 750,000 people that quietly built one of the world’s largest sovereign crypto reserves through hydropower mining.

The Math Behind The Mining

The kingdom began mining Bitcoin in 2019, tapping surplus electricity from its glacier-fed rivers. State-owned Druk Holding and Investments ran the operation, and at its peak in late 2024, the reserve reached nearly 13,000 BTC.

The April 2024 block reward halving cut mining output significantly. The last on-chain deposit above $100,000 into Bhutan-linked wallets occurred more than 12 months ago, raising questions about whether active mining continues at all.

On Tuesday, Bhutan moved 100 BTC — worth about $8.1 million — out of its holding wallets, according to blockchain analytics firm Arkham Intelligence.

The country has now offloaded roughly $230 million in Bitcoin since January, averaging about $50 million a month. Current holdings sit at approximately 3,100 BTC, valued near $252 million.

A Sell-Off With No Fixed Timeline

Arkham projects Bhutan will exhaust its reserves before the end of September if sales continue at the current pace.

Not everyone buys that timeline. Markus Levin, co-founder of XYO, said the projection assumes a steady rate of selling — but that is not how Bhutan has operated.

Sales started with 2,077 BTC worth $163 million in late 2024, followed by a $100 million tranche in September 2025, with quieter stretches in between.

Bitcoin is now trading at $79,825. Chart: TradingView

Earlier this year, transfers picked up again. Reports indicate Bhutan moved over $120 million in Bitcoin during March alone, including a single transfer of 519.7 BTC valued at $36.75 million at the time. Coins are often routed through Singapore-based trading firm QCP Capital, according to reports.

Analysts say the pattern reflects a deliberate treasury approach. Lacie Zhang, a research analyst at Bitget Wallet, described the activity as an active sovereign strategy aimed at monetizing gains while keeping some long-term exposure.

Since the Bitcoin was mined at near-zero cost, every sale generates profit regardless of timing.

Crypto Ambitions Remain Intact

The sell-down has not slowed Bhutan’s broader push into digital assets. Gelephu Mindfulness City, a special administrative region in southern Bhutan, has been designated to hold Bitcoin, Ethereum, and BNB as strategic reserves.

King Jigme Khesar Namgyel Wangchuck pledged up to 10,000 BTC — then worth around $1 billion — toward the city’s development in December 2025.

Featured image from Pexels, chart from TradingView

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New York Judge Pushes Back Hearing for Aave’s Bid to Unfreeze $71M in ETH

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A New York judge has delayed a decision on Aave’s emergency bid to unfreeze $71 million worth of crypto tied to victims of the $293 million Kelp DAO hack, asking for additional information ahead of a new hearing in June. 

Aave has sought to use $71 million in ETH that Arbitrum froze to assist with recovery efforts following the Kelp DAO hack, one of the worst DeFi hacks this year.

However, US law firm Gerstein Harrow LLP filed a restraining notice at the start of May, arguing its clients have a claim to the funds. Aave then filed an emergency motion to get the funds unlocked, arguing that user liquidations and potential DeFi market destabilization could occur if the funds are not unlocked soon.   

According to documents filed Wednesday in the Southern District of New York, Judge Margaret M. Garnett said Aave had not adequately outlined how “compounding losses” on user funds could “occur if the restraining notice remains in place” in its filing earlier this month. 

Judge requests more information from both sides 

Judge Garnett acknowledged that the case is complex and that there are risks for the victims, and called for additional briefings from both sides to further outline their cases.  

“The court recognizes the risk of potential near-term harm to Aave LLC and Aave Protocol users. Due to the complexity of the issues raised in the parties’ motions and at oral argument on May 6, 2026, and the extremely abbreviated timeline on which they were briefed, the Court orders the parties to submit supplemental briefing,” Judge Garnett said.  

The judge outlined six key points on which the court wants more information, including whether the hacking transactions are governed by New York’s shelter principle; the legal distinction between fraud and theft and what interest hackers have in stolen assets; which law controls creditor priority over the frozen assets; whether a constructive trust would be an appropriate remedy and whether Aave or Arbitrum can identify individual victims to return the assets on a pro rata basis.

Aave and Gerstein Harrow will now have until May 22 to submit their briefs, with the hearing scheduled for June 5.

Related: DeFi can freeze stolen funds, but not everyone agrees it should

The case comes amid broader Kelp DAO recovery efforts. Kelp and Aave announced Tuesday that they had taken important steps to restore the backing of rsETH. 

The hacker’s rsETH have been burned on Arbitrum, while the lost tokens, worth about $278 million, will be restored over the next two weeks via funds from the Aave Recovery Guardian multisignature wallet.  

Once the associated smart contracts are reactivated, all rsETH uses will return to normal. 

Source: Kelp DAO

Magazine: AI-driven hacks could kill DeFi — unless projects act now

Bitcoiner Claims Claude Helped Him Recover 5 Bitcoin

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A Bitcoiner’s post has gone viral on X after he claimed to use Anthropic’s AI chatbot Claude to recover five Bitcoin worth about $320,000 that he had been unable to access for more than a decade. 

In an interview with MTS on Wednesday, pseudonymous X user Cprkrn said he created “really complicated passwords” on blockchain.info and forgot one of three passwords after changing it several years ago.

Over the last eight weeks, Cprkrn said he used AI to attempt to brute force “trillions of passwords,” but to no avail.

Then, in a “last-ditch effort” earlier this week, Cprkrn said he gathered all of his old college notebooks as well as a laptop he had used into Claude, which helped him recover an old password and a crucial wallet backup file that corresponded with that password, ultimately enabling him to access the Bitcoin wallet.

Source: Cprkrn

Industry reports estimate that between 2.3 million and 4 million Bitcoin (BTC) are inaccessible, representing about 11% to 19% of the cryptocurrency’s maximum supply because of forgotten or lost seed phrases, burned coins or other reasons. There are entire businesses dedicated to helping cryptocurrency users recover lost coins. 

How Cprkrn used Claude to recover his Bitcoin

Cprkrn’s seed phrase hunt was conducted over eight weeks, with Claude helping him search two Macs, two external hard drives, an Apple Notes export, iCloud Mail, a Gmail inbox and X messages, totaling more than 1 gigabyte of data.

One of those devices was his college computer, on which Claude discovered a critical wallet backup file from December 2019.

From there, Cprkrn, with Claude’s assistance, managed to decrypt the file using a password derived from a notebook mnemonic, enabling him to find the seed phrase for the long-dormant Bitcoin wallet. 

While Cprkrn didn’t provide direct evidence of Claude searching through his devices, he shared a link from Blockchain.com’s Bitcoin explorer showing that about 5 Bitcoin was transferred from wallet address “14VJy…ofuE6” across five transactions on May 13. 

Prior to those transactions, the coins had been dormant since early 2015. 

Over 3.5 trillion passwords were tested before succeeding

The recovery came after Claude unsuccessfully used BTCRecover — an open-source seed recovery tool — and the software program Python to test around 34 billion passwords with brute force.

Related: Bitcoin whale ‘still short’ BTC despite facing $13M in losses 

Claude also used password recovery tool Hashcat to test another 3.4 trillion passwords, which also proved unsuccessful.

Just $15 in AI compute was used to conduct the searches and test passwords, according to Claude’s summary of the recovery efforts.

Source: Cprkrn

Despite the success, some members of the crypto community said Cprkrn overstated Claude’s role in retrieving the Bitcoin, arguing that it only assisted with the searching efforts and didn’t crack the wallet as Cprkrn suggested.

“Claude didn’t do anything other than search his files,” Reddit user MeteorSwarmGallifrey said in the technology subreddit, adding that Claude didn’t do anything “groundbreaking.”

Magazine: eToro founder timed Bitcoin top perfectly due to belief in 4 year cycles 

Did Claude just ‘crack’ a bitcoin wallet? AI tool helps find 5 BTC stuck for years

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A viral X post is claiming Claude ‘cracked’ a forgotten bitcoin wallet to recover 5 BTC from a user’s computer.

But don’t get caught in the hype as that is not what happened. Anthropic’s AI simply helped the owner search their own computer for an old wallet file, which was then decrypted with a password the owner already had written down in a notebook.

User cprkrn posted the recovery on Wednesday, calling it “the most obvious opening ever” once they figured out what had happened.

The owner had been trying for eight weeks to brute-force the password on their current Blockchain.com wallet, testing roughly 3.5 trillion combinations using the btcrecover service on a rented computing chip.

The recovery happened when the user “dumped my whole college computer into Claude” as a last-ditch effort, and the assistant located an old wallet backup from December 2019 that was encrypted with a password the user already had written down in a notebook.

The old password decrypted the old backup, which contained the same private keys controlling the current funds, since bitcoin private keys never change.

The password itself was “lol420fuckthePOLICE!*:)” per the user’s own X disclosure. Total Vast.ai GPU spend on the failed brute-force attempts was around $15, with the recovery effectively a file search.

For context, breaking bitcoin’s actual cryptography would require either a working quantum computer running Shor’s algorithm or a flaw in elliptic-curve cryptography that has not been found in 16 years of public scrutiny.

CoinDesk’s post-quantum security series earlier this year covered the timeline expectations for that threat, with most researchers placing the cryptographically relevant quantum computer at least five to ten years out.

But the user’s experience opens up a further door for AI inside crypto. Forgotten wallets from bitcoin’s early years now hold serious value, and recovery tools like btcrecover have existed for years to help users test password variations against encrypted wallet files.

The problem has always been that most recovery work requires technical expertise that the average lost-bitcoin owner does not have.

That is where AI assistants can step in. Instead of manually sorting through folders, timestamps, and backup files across years of accumulated drive clutter, owners can hand the search to an LLM and have it identify patterns, narrow the search space, and surface candidate files.

Millions of bitcoin are believed to remain inaccessible because owners lost passwords, drives, or recovery phrases during the early years.

With bitcoin trading around $79,000, a forgotten laptop in a closet could be holding six figures. Back up wallet data carefully, store recovery phrases somewhere that is not your memory, and check old hardware before you sell it.