A recent transfer of 210,000 Bitcoin from long-term holders highlights concerns over custody practices following a Coldcard security breach.
Significant Bitcoin Transfers Signal Custodial Changes Amid Coldcard Incident
A recent movement of approximately 210,000 Bitcoin (BTC) from long-term holder (LTH) wallets has raised concerns about custody practices following a security breach at Coldcard. This substantial transfer indicates a potential shift in storage methods rather than typical selling behavior.
According to data from Glassnode, the total supply of Bitcoin held by long-term holders has fallen from nearly 15 million BTC to about 14.7 million BTC. This decline marks the largest drop since December 2024, a period when Bitcoin was nearing its all-time high of $100,000.
Long-term holders, defined as entities that have held Bitcoin for over 155 days, are typically considered to be “smart money” in the market. Their recent activity contrasts sharply with historical trends where significant spending occurred during market highs. Currently, Bitcoin is trading around $64,000, approximately 50% lower than its peak in October.
The Coldcard incident involved a vulnerability in its firmware, which compromised wallet recovery phrases and led to losses estimated at $114 million. In response, Coldcard recommended that affected users create new wallets and transfer their funds, as merely updating the firmware would not safeguard possibly compromised keys.
This recent movement of Bitcoin appears to reflect a reassessment of security practices among users, with many opting to transfer assets into newly created wallets with improved security features or to regulated custody services. Some holders may also be looking to invest in spot Bitcoin ETFs, which have recently seen inflows of around $754 million, with BlackRock’s iShares Bitcoin Trust being a major contributor.
Importantly, the movement of Bitcoin does not necessarily equate to selling. Instead, it may signify a broader transition in how Bitcoin is stored, indicating a cautious shift in the wake of the Coldcard breach.
