Guy Fawkes 
UNCLASSIFIED
Bitcoin Core bugs have emerged as BTC faces a fresh round of macroeconomic uncertainty. Developers disclosed three vulnerabilities on October 28, following AI-assisted security research by Project Loupe. The disclosures arrived just hours after the Federal Reserve held interest rates steady, leaving holders focused on Friday’s $12 billion Bitcoin options expiry.
BREAKING: Three new Bitcoin Core vulnerabilities discovered including a bug allowing attackers to remotely brick nodes.
The vulnerabilities include two medium-severity flaws that could allow malicious peers to exhaust node memory and a third that could corrupt blockchain undo… pic.twitter.com/oOx2rrK8xe
— Rod Palmer
(@rodpalmerhodl) October 28, 2026
The vulnerabilities affect Bitcoin Core, the software used by nodes to verify transactions and enforce Bitcoin’s rules. One flaw could allow malicious peers to crash nodes running Windows, macOS, and BSD. Another could gradually exhaust memory, while a third could corrupt blockchain undo data under extreme conditions.
Bitcoin Core developers have already released fixes across four maintained release branches. However, the timing puts network security alongside monetary policy and derivatives positioning in an unusually busy week.
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Bitcoin Core Bugs and Node Security
The most serious of the three disclosed issues involves unbounded memory growth through TCP urgent data. A malicious peer could bypass normal memory protections and overwhelm vulnerable nodes running non-Linux operating systems. This flaw does not affect Linux nodes.
A second vulnerability allows memory usage to grow gradually when a peer pretends to use an older Bitcoin protocol. The attacker can exploit weaknesses in message queuing and connection handling to keep accumulating data. Bitcoin Core estimates growth of up to 2 MB per hour per inbound peer and 5 MB per hour per outbound peer.
The third issue concerns oversized undo files, which store information needed to disconnect blocks during reorganizations. Under extreme conditions, a miner could create valid blocks that push an undo file beyond 4 GB. The resulting corruption could cause affected nodes to shut down during specific reorganizations. The fix covers 64-bit systems, but 32-bit systems and nodes using FAT32 storage remain affected.
All three vulnerabilities were classified as easily discoverable through relatively simple methods, including large language model prompts. Project Loupe, led by Elias Rohrer at Spiral, identified the issues through automated AI scanning. Bitcoin Core’s updated security disclosure policy accelerates publication when fixes are available for vulnerabilities considered easy to find.
Fed Holds Rates as Bitcoin Options Expiry Approaches
The Federal Reserve maintained its benchmark interest rate at 3.75%–4.00% on October 28. However, the decision was not unanimous, with Lisa Cook and Beth Hammack favoring a 25-basis-point increase. The official FOMC statement also described economic activity as expanding at a strong pace while inflation remained elevated.
Read Chairman Warsh’s full opening statement from the #FOMC press conference (PDF): https://t.co/TPqQ7MKO7m pic.twitter.com/1SUkOfaU0T
— Federal Reserve (@federalreserve) October 28, 2026
The decision leaves markets weighing persistent inflation against the outlook for monetary policy. Higher interest rates can pressure risk assets by increasing financing costs and making yield-bearing alternatives more attractive. Bitcoin’s reaction will also depend on positioning, liquidity, and expectations surrounding future Fed decisions.
Meanwhile, around $12 billion in Bitcoin options are scheduled to expire tomorrow. Derivatives estimates put the notional value around $12.4 billion, making it a major event for short-term positioning. Traders will watch the balance between calls and puts, alongside key strike prices, as contracts settle.
Options expiry does not automatically trigger a rally or sell-off. However, large concentrations of open interest can influence hedging activity and amplify price movements when market conditions shift. Combined with uncertainty following the Fed decision, the expiry gives traders another reason to monitor volatility closely.
Despite these near-term pressures, Bitwise Chief Investment Officer Matt Hougan has raised his long-term Bitcoin target to $1.6 million by 2036. His [latest investment outlook](https://experts.bitwiseinvestments.com/cio-memos/why-were-more-bullish-on-bitcoin-now-than-last-year) points to growing store-of-value demand and a larger potential institutional investment market.
Hougan’s forecast assumes Bitcoin captures a greater share of these expanding markets over the next decade.
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