RJ Hamster
The Biggest AI Story You Missed
Claude’s Mythos causes cybersecurity stocks to tank… the quantum threat to online security is coming fast… how Jonathan Rose is playing it… has the energy bull topped out?.. where Eric Fry is finding opportunity
Last week, Anthropic – the AI company behind Claude – accidentally left a cache of unpublished documents in a publicly accessible data store. What researchers found inside rattled the cybersecurity world.
The documents revealed that Anthropic has been quietly developing and testing a new model called Claude Mythos, internally code-named Capybara.
According to a draft blog post that was inadvertently exposed, Mythos represents an entirely new tier above Anthropic’s existing Opus models – larger, more capable, and significantly more expensive. Anthropic described it as “by far the most powerful AI model we’ve ever developed” and a “step change” in AI performance.
That alone would have been newsworthy. But here’s what sent a chill through the cybersecurity world…
Anthropic’s own draft language described Mythos as “currently far ahead of any other AI model in cyber capabilities” and warned that it “presages an upcoming wave of models that can exploit vulnerabilities in ways that far outpace the efforts of defenders.”
In other words, Anthropic has built something so powerful that it’s worried about what happens when the wrong hands get hold of it.
The concern reached the highest levels of government almost immediately. According to Bloomberg yesterday, Treasury Secretary Scott Bessent and Fed Chair Jerome Powell summoned the CEOs of major U.S. banks to a meeting on the threat Mythos poses to financial infrastructure.
Goldman Sachs CEO David Solomon confirmed the firm already has the model and is working directly with Anthropic on its security implications.
As Solomon told analysts on yesterday’s Goldman Sachs earnings call:
We’re aware of Mythos and its capabilities. We have the model.
We’re working closely with Anthropic, and all of our security vendors.
Leading cybersecurity stocks felt it immediately.
As you can see below, Palo Alto Networks (PANW) immediately fell about 10%, while CrowdStrike (CRWD) dropped 11% and Zscaler (ZS) shed 14%.
While each has recovered some this week, they’re still down from before the Mythos headlines.
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But here’s where the story gets more nuanced than what a simple selloff suggests
Rather than releasing Mythos broadly, Anthropic says its plan is to give cyber defenders early access first – specifically to help them harden their systems against the wave of AI-powered attacks it believes is coming.
That’s essentially what the Bessent-Powell meeting was about: They encouraged the banks to run Mythos against their own systems to stress-test their defenses.
That’s a telling strategic choice. It acknowledges the threat while also pointing to who survives it: the companies sophisticated enough to absorb a model like Mythos as a weapon in their own arsenal rather than just a threat to their business model.
The cybersecurity firms that can integrate this generation of AI capabilities into their platforms are in a fundamentally different position than those that can’t.
Bottom line: Last week’s selloff painted all the cybersecurity leaders with the same brush. But over time, AI will continue to sift the real winners from the losers.
We’ll keep tracking this as the story develops.
The quantum threat hiding inside the cybersecurity selloff
Mythos isn’t the only story highlighting how cutting-edge technology carries great risk alongside its promise.
Over the weekend, our trading expert Jonathan Rose, editor of Masters in Trading Live, walked his community through a 57-page white paper that most of the market isn’t even aware exists.
The paper’s conclusion is that quantum computers will be able to crack cryptocurrency encryption far sooner than anyone assumed. And the gap between “theoretical threat” and “live problem” is closing 20 times faster than the cryptocurrency industry expected.
Now, anyone can write a paper on such a topic and make bold claims to grab eyeballs. So, why should we give this particular paper any greater respect?
Because it came from a collaboration between Google’s DeepMind research center, Google’s Quantum AI division, Stanford University, and the Ethereum Foundation – not exactly a crew known for crying wolf.
Here’s Jonathan with some of the numbers:
6.9 million Bitcoin across all protocols with reused public keys are vulnerable – that’s 33% of all Bitcoin in existence.
Unspent attacks are possible: fast-clock quantum computers could intercept transactions in real time.
At current valuations, that’s over $2 trillion in potentially vulnerable assets.
The paper doesn’t mince words about what comes next. As the authors write:
It is conceivable that the existence of early quantum computers may first be detected on the blockchain rather than announced.
In other words, the first sign that quantum computing has arrived might not be a press release – but a theft.
Jonathan points toward a sliver of good news: Proof-of-work crypto mining itself is safe.
The vulnerability sits in the cryptographic signatures protecting ownership, not the mining process. But that’s cold comfort given the scale of what’s exposed.
So, what’s the investment move?
Back to Jonathan:
Which blockchain is already built for a post-quantum world?
The answer: Algorand (ALGO).
I’ll be honest – I wasn’t familiar with ALGO before I researched this piece.
But when you dig in, the picture is clear.
Jonathan explains that ALGO was designed from the ground up by Silvio Micali, a Turing Award-winning cryptographer from MIT.
What’s unique is that since its founding in 2017, Algorand was built with post-quantum security architecture at its core. By the time it launched in 2019, it already integrated hash-based and lattice-based cryptographic schemes – like Falcon signatures – designed to resist exactly the attacks this paper describes.
Translation: While other blockchains are scrambling to retrofit their security, Algorand was built from Day 1 to survive the quantum era. This is why when the paper dropped, ALGO surged 20% in a single session.
If you’re not a crypto fan, Jonathan flags Palo Alto, NXP Semiconductors (NXPI)and Cloudflare (NET) as public companies actively building post-quantum cybersecurity capabilities. I’ll note that PANW and NET got considerably cheaper in the wake of last week’s Mythos-based cybersecurity selloff.
However, you decide to play it, here’s Jonathan with more numbers on the opportunity:
The post-quantum cryptography market is currently valued at roughly $400 million.
The paper projects it will grow to $2.8 billion – a 46% compound annual growth rate. That’s not a typo.
Who needs post-quantum security? Everybody at risk. And that’s essentially everyone.
The world needs to change as quantum comes on board.
The world is changing…
The European Union has launched its own post-quantum migration roadmap, and the U.S. National Institute of Standards and Technology (NIST) has finalized its first post-quantum encryption standards in 2024. Meanwhile, the National Security Agency (NSA) and the Pentagon are auditing their cryptographic infrastructure as we speak.
Here’s Jonathan’s bottom line:
The money won’t be made when quantum breaks crypto. It’ll be made when the world starts preparing for it.
This is a big one – we’ll keep tracking this with you.
By the way, if you want to understand how Jonathan identifies setups like this, his Masters in Trading Challenge walks you through that exact process over seven days, using real setups in real time.
From Jonathan:
You’ll see how we identify catalysts, interpret the signals that matter, and translate those into real trades – all while managing risk in real time.
You can learn more right here.
Thinking about selling your energy stocks?
As I write on Tuesday, oil is pulling back sharply. West Texas Intermediate crude is down around 5% to $93 a barrel. Brent is off 3%, trading at $96.
Three things are driving the selloff…
- Reports emerged of a potential second round of U.S.-Iran peace talks in Islamabad, giving traders a reason to price out some of the conflict premium.
- Both the International Energy Agency (IEA) and OPEC slashed their demand forecasts. The IEA now expects global oil demand to contract by 80,000 barrels per day (bpd) this year, a massive swing from its previous estimate of 640,000 bpd growth.
- Yesterday, OPEC cut its second-quarter demand forecast by another 500,000 bpd.
But if this has you thinking about taking all your chips off the table, our global macro expert Eric Fry, editor of Fry’s Investment Report, would urge some caution.
He recently laid out five reasons why elevated energy prices are likely structural, not temporary:
- Ceasefires are fragile.
- The tanker backlog in the Persian Gulf won’t clear overnight.
- Iran has effectively become a toll-taker on the Strait of Hormuz, charging shipping companies up to $2 million per tanker for safe passage.
- Physical energy infrastructure across the Gulf sustained serious damage over six weeks of strikes.
- And countries caught flat-footed by this crisis are now aggressively restocking strategic reserves – locking in demand at elevated levels for months to come.
And let’s not overlook how today’s “good news” comes with its own complications. The U.S. blockade of Iranian ports – announced Monday – directly threatens Iran’s 1.7 million barrels per day of exports through the Strait of Hormuz.
Peace talks in Islamabad or not, the physical oil and gas market remains deeply constrained.
Which brings us to where Eric sees the real opportunity
While most investors reflexively reach for oil stocks when prices spike, Eric thinks the more compelling opportunity sits one step removed from the headlines:
While oil is grabbing all the headlines, the real strategic beneficiary of this crisis is U.S. natural gas – and those prices are actually lower than they were when the war started.
The result is a historic and growing spread between cheap domestic U.S. gas and the desperate global buyers who need it. That spread is not going away. It’s the foundation of a long-term structural shift.
U.S. natural gas prices are set by domestic supply, which is running at record levels – keeping a lid on costs at home. But European gas prices have more than doubled since the war began while Asian liquefied natural gas (LNG) benchmarks have surged.
American producers sit squarely in the middle of that gap, with the largest available incremental LNG export capacity in the world.
Eric has identified three specific energy companies positioned to capitalize on this dynamic in his Fry’s Investment Report portfolio. You can learn more about joining him right here.
We’ll keep you updated on all these stories here in the Digest.
Have a good evening,
Jeff Remsburg
