Key facts
- US spot Bitcoin ETFs have seen a week-long streak of daily inflows, totaling around $620 million.
- A hack of Coldcard hardware wallets resulted in over $116 million in Bitcoin being drained from more than 5,200 addresses.
US spot Bitcoin ETFs have seen a week-long surge in inflows, totaling approximately $620 million, coinciding with a hack that drained over $116 million from Coldcard hardware wallets. Analysts debate whether investors are shifting from self-custody to ETFs.
The surge in Bitcoin ETF inflows following a hardware wallet hack raises questions about investor sentiment towards self-custody versus regulated investment products, potentially influencing future demand for both.
US spot Bitcoin exchange-traded funds (ETFs) have experienced a significant surge in inflows over the past week, with daily gains totaling approximately $620 million. This trend has coincided with a hack affecting Coldcard hardware wallets, which resulted in over $116 million worth of Bitcoin being drained from more than 5,200 addresses, according to TRM Labs. The timing has fueled speculation among analysts, such as Bloomberg's Eric Balchunas, about whether some investors are reconsidering self-custody and opting for the managed security of ETFs. Balchunas noted that while a direct connection is unconfirmed, he cannot "imagine there aren't some who migrate over" in the long term. The Coldcard incident has renewed debates about the risks associated with self-custody, including potential firmware and software vulnerabilities, and highlighted the trade-offs compared to holding Bitcoin through regulated investment products. Binance co-founder Changpeng Zhao suggested that storing crypto on centralized exchanges might be statistically safer than self-custody, citing data on cumulative losses from self-custody incidents versus exchange hacks.