Bitcoin after the US election night: brief crash, quick recovery – and Tether is sitting on 150,000 bitcoin

The US midterm elections shook the Bitcoin price hard overnight: when the first results pointed to a Democratic win, the cryptocurrency briefly fell to around $75,700. On Wednesday morning it is trading above $77,000 again. Also making headlines: Tether's bitcoin holdings, new hack reports and the question of where the next wave of liquidity is supposed to come from.

The price: an overnight rollercoaster#

Bitcoin was not moving alone. S&P 500 futures fell 1.3 percent, Nasdaq-100 futures as much as 2.3 percent. The dollar weakened against most currencies, the yield on ten-year US Treasuries fell six basis points to 4.90 percent, and the MSCI Asia-Pacific index lost almost 2 percent. Investors fear less cheap money if the Democrats sweep. Government bonds, on the other hand, benefit when gridlock in Washington slows further tax cuts and, above all, spending.

The election: Democrats take the Senate#

It is now clear that the Democrats are taking the majority in the Senate. For the crypto industry this has concrete consequences: the CLARITY Act, which is meant to create rules for the US crypto market, failed a procedural vote in the Senate in September by 49 to 50. Now it has no chance of getting through the Senate.

Tether: 150,000 bitcoin – and a gap in the records#

The most-shared number of the day came from Lugano. According to Decrypt, Tether CEO Paolo Ardoino said at the Plan ₿ Forum:

"We have give or take 150,000 bitcoin ourselves. It's not much, but it's honest work."

That would be around $11.5 billion. Notably, the reserve report for the third quarter lists bitcoin worth $8.37 billion at a price of $83,621 – roughly 100,060 BTC. So around 50,000 coins do not show up in the public records. Ardoino did not say where they are held or when they were bought; Tether has long stressed that company bitcoin is held separately from the USDT reserves. Since May 2023, Tether has put up to 15 percent of its realized operating profits into bitcoin; in the third quarter alone, net operating profit was $1.5 billion.

Security: hacks now hit banks too#

The series of hacks of the past few days continues. According to ZachXBT, the French banking group Crédit Mutuel Arkéa is the suspected victim of a crypto theft of more than $133 million. "I suspect the amount stolen is larger when accounting for OTC activity," says ZachXBT. The bank has not confirmed its involvement. Kraken and Crypto.com say they have restricted suspicious accounts. Brazilian exchange Mercado Bitcoin promises its customers full compensation after the attack on November 2; officially, according to News.Bitcoin.com, it involves around $38 million, while Arkham analyst Emmett Gallic estimated more than $46 million. And in its investigation report, Binance traced how the $6.3 billion hack began with a fake job interview.

Longer passphrases, fake transactions, self-scanned code: what Bitcoin users can learn from the wave of hacks

Today's tech news share a common theme: security for everyday use. After the Coldcard thefts, Trezor now allows much longer passphrases, Bitcoin-Safe protects against manipulated data from the network, and a developer shows how to check open-source code for vulnerabilities with simple means.

Trezor: passphrases up to 128 characters#

Hardware wallet maker Trezor has increased the maximum length of the optional passphrase from 50 to 128 characters. According to the Trezor blog, the new limit is available with the current Trezor Suite and new device firmware; older firmware stays at 50 characters. According to CoinTelegraph, this applies to the Model T, Safe 3, Safe 5 and Safe 7; the Model One keeps the old value.

Trezor explicitly cites the Coldcard thefts from the summer as the reason. Back then, a firmware bug caused some Coldcard devices to generate their recovery phrases with far too little randomness. Attackers were able to recompute these phrases offline and drained thousands of addresses, more than $100 million in total. Not all victims lost money: "Those with a strong, unique passphrase were protected," Trezor writes.

Simply put: the 12 or 24 words of the seed phrase are like the master key to a house. The passphrase is an additional, freely chosen password – often called the "25th word" – that turns the same key into a completely different house, with its own addresses and its own balance. Anyone who only knows the words is standing in front of the wrong house. The practical advantage: even if the seed phrase was stolen, photographed or, as with Coldcard, weakly generated, the money behind a strong passphrase stays safe. More characters mean you can use, for example, a whole sentence that is easy to remember but hard to guess. Trezor warns, however: if you forget or mistype the passphrase, you lose access – it must be backed up just as carefully as the words themselves.

Looking for vulnerabilities yourself: Talip's guide#

Bitcoin developer Talip (@otaliptus), who according to The Bitcoin Insider was the first to confirm the Coldcard hack, has published a practical guide to scanning open-source code. In his post about it, he writes that he spent two to three months searching Bitcoin repositories: "The pace is surreal, and it's very hard to keep up." The guide deliberately focuses on methods that are "simple and cheap" – for everyone who does not have the resources of a large AI lab or professional red teams. The practical benefit: open source is only more secure if someone actually looks. The simpler the tools, the more eyes check the code that wallets and nodes run on.

Attacks are becoming more human – and AI-assisted#

How important this is shows in the reports on the big hacks. According to Binance, the $6.3 billion attack began with a fake job interview; the attackers used compromised employee computers, stolen credentials and a manipulated AI tool. The documentation service GitBook, used by many crypto projects, reported an AI-assisted breach according to Decrypt and asked users to rotate keys and tokens. According to The Block, Binance founder CZ is calling for an industry security alliance because AI-assisted attacks are on the rise.

The lesson for private users: the weak point is rarely Bitcoin's cryptography, but almost always the human and their computer. A hardware wallet that lets you confirm transactions on its own display, and spreading funds across multiple keys, help against exactly that.