Bitcoin ETFs Bag $620 Million as Coldcard Wallet Exploit Shakes Self-Custody Trust - U. Today
Cover image viadepositphotos. comDisclaimer: The opinions expressed by our writers are their own and do not represent the views of U. Today. The financial and market information provided on U. Today is intended. . .
Cover image viadepositphotos. comDisclaimer: The opinions expressed by our writers are their own and do not represent the views of U. Today. The financial and market information provided on U. Today is intended for informational purposes only. U. Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available. The coordinated hack of Coldcard wallets, which cost investors 1,800 BTC, is triggering an emergency migration of capital to Wall Street, withU. S. spot Bitcoin ETFs absorbing $620 million in net inflowsin just a few days. Bloomberg senior ETF analystEric Balchunaspointed to this direct connection, noting that funds such as IBIT and FBTC have been receiving fresh money every day since the incident, amounting to an "excellent cash inflow after a brutal summer. "The code that broke crypto's golden ruleMarket panic erupted over details ofa technical flaw in 2021 firmwarereleased by Canadian company CoinKite. Because of a software bug, Coldcard devices ignored their built-in random number generator and created predictable seed phrases based on the devices' serial numbers. HOT StoriesThis allowed hackers to mathematically calculate private keys and remotely drain thousands of addresses, with total losses already exceeding $116 million. Remarkably, just a couple of weeks before the hack was discovered, the developers had reportedly reviewed the code using AI, but the artificial intelligence failed to detect the vulnerability. You Might Also LikeThis technological failure is sharply shifting the balance of power in favor of regulated funds. As Balchunas emphasized, investors are being forced to decide whom they trust if "some scumbag decides to mess around" with their Bitcoin: "a five-person boutique in Canada" — meaning CoinKite — orLarry Fink's BlackRock empire, with 25,000 employees and $15 trillion under management. Daily net capital flows for IBIT, FBTC, BITB, ARKB, and MSBT Bitcoin ETFs since Coldcard incident, Source:Eric Balchunas on X via BloombergAgainst this backdrop, traditional finance "doesn't seem so lame anymore," the analyst said, while for basic long-term investing, it is becoming "hard to find a reason to use anything other than an ETF. "You Might Also LikeHowever, within the Bitcoin community itself, this shift is creating significant tension. Attempting to reassure those concerned about Wall Street control, Balchunas explained that exchange-traded funds are "not 'The Establishment'" and are nothing like the "fat-cat hedge funds you see on television," because they operate on extremely thin margins. Still, if you need to use Bitcoin to flee a country or bypass censorship, an ETF will not help you at all, the analyst admitted. But for ordinary use cases, the mass-market investor is now choosing the security of major custodians rather than fighting wallet firmware alone, and $620 million in fresh inflows confirms it.