Coldcard Exploit Triggers Institutional Accumulation and Retail Selloff

The recent firmware bug in hardware wallets has led to a significant shift in Bitcoin holdings among retail and institutional investors.

According to on-chain data from Santiment, since July 29, Bitcoin wallets holding between 10 and 10,000 BTC have collectively added 19,610 coins to their stacks, representing a 0.14% increase.

This change is in stark contrast to the smallest retail wallets, which have trimmed their positions by 0.55% over the same window.

The catalyst for this shift was the exploitation of a critical vulnerability in Coldcard hardware wallets, resulting in over $87 million worth of stolen Bitcoin due to a firmware bug that originated from an update pushed back in March 2021.