Bitcoin users moved 39,600 BTC in small transactions as a suspected ongoing Coldcard wallet hack prompted the highest volume of sub-1 BTC transfers since the 2022 FTX collapse.

Key Points

• Bitcoin transfers under 1 BTC reached 39,600 units on Friday, marking the highest daily volume since November 2022.
• Galaxy Research reports the suspected Coldcard hack has resulted in the theft of 1,367 BTC, valued at approximately $88.6 million.
• The attack has impacted 4,585 addresses, with researchers identifying a recent wave that drained an additional 207.7 BTC.
• Alex Thorn of Galaxy Digital has urged all users to move funds from Coldcard-generated addresses immediately to prevent further losses.
• Industry experts remain divided on whether the incident represents a failure of self-custody or a specific vulnerability within one hardware wallet provider.

Why it Matters

The incident has reignited a significant debate regarding the security risks of self-custody versus the convenience of regulated financial products like Bitcoin ETFs. This event serves as a critical stress test for the crypto industry, highlighting the ongoing challenges of protecting digital assets without relying on third-party intermediaries.