Glassnode data suggests a significant shift in Bitcoin holdings following a security incident at Coldcard, with 210,000 BTC moving from long-term holder wallets in the past week.
The movement of Bitcoin from long-term holder (LTH) wallets, defined by Glassnode as entities holding coins for about 155 days, has raised questions about user behaviour. The decline in LTH supply, now at 14.7 million BTC, follows a firmware breach at Coldcard, which reportedly allowed attackers to reconstruct recovery phrases due to weak randomness in the software.
Coldcard has advised affected users to generate new wallets and transfer funds, though the exact number of impacted addresses remains unspecified. The breach, alleged to have caused losses of up to $114 million, has prompted caution among holders, with some potentially relocating assets to alternative storage solutions.
Bitcoin’s price remains near $64,000, approximately 50% below its October all-time high, while U.S. spot bitcoin ETFs, including BlackRock’s iShares Bitcoin Trust, saw $754 million in inflows over the same period. Analysts note that the decline in LTH holdings may reflect a shift in storage practices rather than immediate selling, though this remains unconfirmed.
The incident underscores growing concerns over hardware wallet security, with CoinDesk reporting that Coldcard urged users to take preventive measures. The interplay between on-chain activity and market sentiment will likely be closely monitored as the cryptocurrency sector grapples with the implications of the breach.
Written by Daniel Brooks
Security Desk
