Demand for US spot Bitcoin exchange-traded funds has accelerated over the past week, with a string of daily inflows coinciding with the Coldcard wallet hack.
The timing has prompted speculation about whether some investors are reconsidering self-custody.
Where the money went
According to Bloomberg senior ETF analyst Eric Balchunas, BlackRock’s iShares Bitcoin Trust (IBIT), Fidelity Wise Origin Bitcoin Fund (FBTC), Bitwise Bitcoin ETF (BITB), ARK 21Shares Bitcoin ETF (ARKB), and the Defiance Daily Target 2X Long MSTR ETF have recorded inflows every trading day since the weekend exploit, totaling roughly $620 million.
Balchunas was cautious about drawing a direct link, writing on X:
“I’m not saying it’s connected, we just don’t know. Although long-term I can’t imagine there aren’t some who migrate over.”
The Coldcard exploit drained more than $116 million worth of Bitcoin from over 5,200 wallet addresses, according to blockchain intelligence firm TRM Labs.
Self-custody debate reignited
The hack renewed concerns that even hardware wallet users can be exposed to firmware flaws and software vulnerabilities.
It also reignited the debate over holding Bitcoin directly versus gaining exposure through regulated products where custody is handled by institutional providers.
Binance co-founder
Binance co-founder Changpeng “CZ” Zhao argued that storing crypto on centralized exchanges may now be “statistically safer” than self-custody, citing data that cumulative losses from self-custody incidents have surpassed those from exchange hacks.
CZ noted:
“Hack data is easier to collect on the CEX side, usually major news. It is harder on the self-custody side, where hacks, lost coins, etc are often not reported.”
The debate comes as AI-assisted cyberattacks grow more sophisticated, with swap service Boltz recently suspending its non-custodial bridge over similar concerns.
