Bitcoin News: Coldcard Hack Pushes Transfers to FTX-Era High

Key Insights

• Bitcoin news tracked the strongest small-wallet transfers since FTX collapsed.
• Galaxy Research linked 1,367 BTC to three suspected attack waves.
• Coldcard’s firmware flaw renewed debate over Bitcoin self-custody risks.

Smaller Bitcoin holders moved funds at their fastest pace since FTX collapsed. CryptoQuant data showed sub-1 BTC transfers reached 39,600 BTC on Friday. The movement pushed bitcoin news toward wallet security and custody risk.

The activity mattered because it reflected defensive movement rather than broad accumulation. A firmware flaw exposed weak seed generation across several Coldcard models. Bitcoin traded near $63,124 on Sunday as users assessed self-custody risks.

Bitcoin News Tracks a Surge in Smaller Transfers

CryptoQuant research head Julio Moreno said transfers below 1 BTC reached 39,600 BTC on Friday. That marked the highest daily total since November 2022.

Moreno compared the reading with 39,900 BTC moved on Nov. 16, 2022. That transfer spike followed FTX’s Chapter 11 filing on Nov. 11, court records showed.

The latest movement remained only 300 BTC below that earlier peak. Moreno said smaller holders had not moved comparable volume since the exchange collapse.

The figure did not show where each transfer ended. However, its timing aligned with warnings directed at Coldcard users.

The pattern therefore suggested wallet migration, though CryptoQuant had not classified every transaction. That distinction matters because exchange deposits could imply selling. Wallet transfers may instead reflect security action.

Bitcoin News Focuses on Three Coldcard Attack Waves

Galaxy Research identified three suspected attack waves against Coldcard-generated addresses. Its analysis tracked 1,367 BTC across 4,585 affected addresses.

The third wave removed another 207.7 BTC from 1,912 addresses between July 31 and Aug. 1. Earlier waves used different wallet counts and transaction patterns.

Galaxy’s findings placed estimated losses near $88.6 million at prevailing prices. The total ranked among 2026’s largest disclosed Bitcoin wallet thefts.

Alex Thorn, Galaxy Digital’s research head, said investigators continued identifying victims and attacker addresses. He also urged exposed users to migrate funds from affected seeds.

The stolen btc crypto remained concentrated across attacker-controlled addresses during initial tracking. Researchers had not reported broad exchange deposits from those wallets.

Coldcard Firmware Flaw Exposed Weak Seed Generation

Coinkite published a security advisory on July 30 after users reported missing funds. The company said affected firmware generated seeds with insufficient entropy.

Its advisory covered Mk2 and Mk3 firmware versions 4.0.1 through 4.1.9. It also covered earlier fixed-release versions across Mk4, Mk5, and Q devices.

Coinkite said firmware updates could prevent unsafe seed generation. However, updates could not repair seeds created under affected software.

Block’s Bitcoin Engineering and Security team traced the flaw to a random-number-generator integration error. The code used a deterministic software fallback instead of intended hardware entropy.

Block said newer devices added secure-element entropy but retained only 32 bits during reseeding. That structure left a smaller candidate space than users expected.

Coinkite released corrected firmware for every affected model and release track. It advised users to generate fresh seeds after installing corrected versions.

The company also said strong Bitcoin Improvement Proposal 39 passphrases reduced immediate exposure. Yet it still recommended migration because passphrases did not repair weakened seeds.

Bitcoin News Revives the Self-Custody Versus ETF Debate

Casa Chief Executive Officer Nick Neuman rejected claims that self-custody had failed. He argued that distributed ownership gave users time to react.

Neuman estimated self-custody protected roughly ten times more Bitcoin than attackers stole. His estimate remained directional because total exposed balances were still unknown.

Bloomberg exchange-traded fund analyst Eric Balchunas offered the opposing custody argument. He said Bitcoin funds provided familiar safeguards and simpler access for many investors.

That comparison separated asset exposure from direct ownership. Fund shareholders hold regulated securities. Self-custody users control private keys and transaction authority.

The Coldcard failure therefore tested one provider’s seed-generation process, not Bitcoin’s settlement network. Still, losses showed hardware custody depends on firmware, entropy, and migration practices.

For btc crypto investors, the immediate issue remained operational rather than directional. Bitcoin’s price showed limited reaction while wallet movements accelerated.

Coinkite said its investigation remained active and promised a formal technical review. That report and further Galaxy tracking will provide the next verifiable developments.

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