Key Points
- Bitcoin users transferred 39,600 BTC in transactions under 1 BTC, marking the highest daily level since the FTX collapse in November 2022, according to CryptoQuant.
- Researchers estimate the suspected Coldcard wallet incident has now resulted in the theft of approximately 1,367 BTC, valued at $88.6 million.
- Galaxy Research warned the attack appears to remain active and urged affected Coldcard users to immediately move funds to new wallets.
- The incident has reignited debate over Bitcoin self-custody versus custodial solutions such as cryptocurrency exchanges and spot Bitcoin ETFs.
Bitcoin users dramatically increased self-managed wallet activity as concerns surrounding the suspected Coldcard wallet security incident intensified.
According to CryptoQuant Head of Research Julio Moreno, transfers of less than 1 BTC reached 39,600 BTC on Friday, the highest daily volume recorded since the days following the collapse of cryptocurrency exchange FTX in November 2022.
The total was only 300 BTC below the 39,900 BTC transferred on Nov. 16, 2022, shortly after FTX entered bankruptcy.
Moreno said the surge suggests retail Bitcoin holders are proactively securing their assets in response to the developing security incident.
Estimated Losses Reach Nearly $89 Million
Security researchers continue to identify new victims linked to the suspected Coldcard wallet vulnerability.
According to Galaxy Research, the latest wave of unauthorized transfers involved another 207.7 BTC, worth approximately $13.2 million, bringing total estimated losses to 1,367 BTC, or roughly $88.6 million, across 4,585 Bitcoin addresses.
Researchers believe the attack first emerged in late July and may still be ongoing.
Galaxy Digital’s Head of Firmwide Research, Alex Thorn, warned that investigators continue discovering additional victim addresses and urged anyone using potentially affected Coldcard-generated wallets to move their Bitcoin immediately if they have not already done so.
Investigation Remains Active
Researchers continue working with affected users to identify compromised wallets and trace stolen funds across the Bitcoin blockchain.
According to Galaxy Research, reports submitted by users have helped investigators map attacker activity and expand the list of compromised addresses.
The company emphasized that the investigation remains active and additional wallets could still be at risk if users delay migrating their funds.
Self-Custody Debate Returns
The Coldcard incident has renewed discussion throughout the cryptocurrency industry regarding the benefits and risks of Bitcoin self-custody.
Supporters of self-custody argue that controlling private keys remains one of Bitcoin’s defining features and allows users to avoid counterparty risks associated with centralized exchanges.
Casa CEO Nick Neuman defended self-custody, arguing that the decentralized nature of Bitcoin ownership gives users the ability to react quickly to security incidents. He estimated that substantially more Bitcoin remains safely protected through self-custody than has been compromised in the current incident.
Meanwhile, supporters of traditional financial products pointed to regulated investment vehicles as an alternative.
Bloomberg ETF analyst Eric Balchunas argued that spot Bitcoin exchange-traded funds (ETFs) offer a simpler and potentially safer option for many investors by removing the responsibility of managing private keys.
Others countered that the incident reflects a vulnerability affecting a specific wallet implementation rather than a broader failure of self-custody itself.
Security Remains Central to Bitcoin Ownership
The Coldcard incident serves as a reminder that securely generating and protecting wallet recovery phrases remains fundamental to safeguarding digital assets.
While researchers continue examining the cause of the compromise, the event has prompted many Bitcoin holders to review their wallet security practices and migrate funds where appropriate.
The broader Bitcoin network itself has not been compromised, and investigators continue working to determine the full scope of the incident.
Outlook
The surge in small Bitcoin transfers highlights how quickly the cryptocurrency community responds to potential security threats affecting self-custody. As researchers continue investigating the Coldcard wallet incident, the event is likely to influence discussions around wallet security, private key management and the balance between self-custody and institutional custody solutions. Strengthening wallet security and improving operational safeguards will remain key priorities as Bitcoin adoption continues to expand.
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