Bitcoin Slumps After Coldcard Hack, ETF Outflows Weigh on Market

Bitcoin's price has been affected by a recent security incident involving the Coldcard hardware wallet. Attackers exploited a long-standing firmware flaw to drain over 1,100 wallets of approximately 1,082 BTC on July 30.

The incident serves as a reminder that even trusted hardware can be vulnerable if a vulnerability goes unnoticed for years. Coinkite released patched firmware and instructed affected users to generate new wallet seeds rather than simply updating their devices.

ETF outflows have also weighed on the market, with Blackrock's IBIT leading $265 million in Bitcoin ETF outflows on July 31. Institutional flows often shape short-term market psychology more than long-term fundamentals.

The market is watching two unrelated developments that could dominate discussions throughout August: BIP-110 and Paul Sztorc's planned eCash hard fork around Aug. 21. The fork does not modify Bitcoin itself, but instead creates a separate blockchain that mirrors Bitcoin's ledger, allowing eligible holders to receive an equivalent allocation of the new asset.