Coldcard Hack Spurs $620M ETF Inflow, Self-Custody Debate Heats Up

The recent Coldcard wallet hack has led to an influx of investments into US spot Bitcoin exchange-traded funds (ETFs), totaling roughly $620 million. According to Eric Balchunas, a Bloomberg senior ETF analyst, this surge in demand has been recorded every trading day since the weekend exploit.

The Coldcard hack drained more than $116 million worth of Bitcoin from over 5,200 wallet addresses, highlighting the operational risks associated with self-custody. Balchunas noted that while there is no clear link between the hack and the ETF inflows, it's possible that some investors are reconsidering self-custody.

Binance co-founder Changpeng Zhao weighed in on the debate, suggesting that storing crypto on centralized exchanges may be statistically safer than self-custody. He cited data from analyst Willy Woo that cumulative Bitcoin losses from self-custody incidents have surpassed those from exchange hacks.