Coldcard Hack Drives Bitcoin Users to Move Record Amounts in Small Transactions

Bitcoin users moved an unprecedented 39,600 BTC in small transactions on Friday, marking one of the largest daily totals since the FTX collapse. According to CryptoQuant head of research Julio Moreno, this surge in activity is a response to the ongoing suspected Coldcard hack that has been draining user funds.

The attack, which first surfaced in late July, appears to be still active and has already stolen an estimated 1,367 BTC worth around $88.6 million across 4,585 addresses. Researchers at Galaxy have identified a new wave of victims, with the latest drain totaling 207.7 BTC, or about $13.2 million.

The incident has reignited debate over the risks and benefits of Bitcoin self-custody, with some arguing that it's not as secure as claimed. Nick Neuman, CEO of Casa, pushed back against claims that 'self-custody is over,' estimating that potentially 10 times more Bitcoin was protected through self-custody than was stolen so far.

However, others have countered that the incident reflects a single wallet provider's failure rather than a flaw in self-custody. Bloomberg ETF analyst Eric Balchunas argued that Bitcoin ETFs offer a safer alternative for investors.