Bitcoin ETF Inflows Soar Amid Coldcard Hack Speculation
Demand for US spot Bitcoin exchange-traded funds (ETFs) has surged over the past week, driven by daily inflows totaling roughly $620 million. The sudden interest coincides with a recent hack of Coldcard wallets that drained more than $116 million worth of Bitcoin from over 5,200 wallet addresses.
Bloomberg senior ETF analyst Eric Balchunas notes the timing but hesitates to draw a direct link between the two events, stating 'I'm not saying it's connected, we just don't know.' He speculates that some investors may be reconsidering self-custody in favor of regulated investment products like spot Bitcoin ETFs.
The Coldcard hack has reignited debate over the security risks associated with self-custody and hardware wallets. Binance co-founder Changpeng 'CZ' Zhao argues that storing crypto on centralized exchanges may now be statistically safer than self-custody, citing data from analyst Willy Woo that cumulative Bitcoin losses from self-custody incidents have surpassed those from exchange hacks.
CZ also pointed out the difficulty in collecting hack data for self-custody incidents compared to centralized exchanges. The debate comes as AI-assisted cyberattacks become increasingly sophisticated, with Bitcoin swap service Boltz suspending its non-custodial bridge due to a steady rise in exploits that allow attackers to identify and exploit vulnerabilities faster than its team can patch them.