ETF Inflows Surge to $1 Billion as Coldcard Breach Sparks Interest in Regulated Products
The inflow of capital into Bitcoin and Ethereum spot ETFs has accelerated significantly, reaching $1 billion in the first week of August for BTC products. This is the highest level since April, according to Bloomberg senior ETF analyst Eric Balchunas. Ethereum spot ETFs also drew roughly $244.9 million during the same period.
The recent breach of hardware wallet Coldcard has been cited as a possible factor contributing to this increased interest in regulated spot ETFs. At least approximately $111 million worth of Bitcoin is believed to have been illicitly withdrawn from Coldcard wallets, with estimates reaching as high as around $130 million.
BlackRock's iShares Bitcoin Trust (IBIT) led Bitcoin spot ETF inflows, gathering roughly $693.7 million for the week, accounting for over 80% of the category total. Fidelity's Wise Origin Bitcoin Fund (FBTC) also recorded inflows of about $116.4 million.
The concentration of capital in these two largest funds by assets under management suggests investors are favoring the most liquid products. However, explaining this wave of inflows solely through the Coldcard incident is difficult, as Ethereum spot ETFs also recorded their highest inflows since April during the same period, which has no direct connection to a Bitcoin-specific hardware wallet vulnerability.
In fact, some observers note that inflows into Ethereum ETFs had already begun several days before the Coldcard issue was publicly disclosed. This suggests that the increased demand for crypto assets may be due to a broader recovery in institutional demand rather than a simple flight from self-custody to ETFs.