Roughly $1 billion in net inflows has been recorded this week for US spot Bitcoin exchange-traded funds (ETFs), their strongest performance since April. The rebound follows a security incident involving Coldcard, a Bitcoin hardware wallet, which reportedly led to the theft of approximately $116 million in Bitcoin.
Analysts suggest the surge in ETF demand may reflect a shift in investor preferences, with some reportedly moving away from self-custody models amid ongoing regulatory and security concerns. Eric Balchunas, a Bloomberg ETF analyst, noted that while the link between the Coldcard hack and increased ETF inflows remains unproven, correlation does not necessarily imply causation.
The incident has reignited debates over the safety of self-custody solutions, with uncertainty persisting around the long-term viability of such approaches. Balchunas added that long-term investor migration from cold storage to ETFs is “imaginable,” though no definitive evidence has been presented to support this claim.
Bitcoin’s trajectory since last October has been marked by periods of relative stability, with the term “silent IPO” used to describe the gradual accumulation of assets by holders. However, recent volatility underscores the challenges facing the sector as regulators continue to weigh in on the future of digital assets.
Written by Oliver Grant
Markets Desk
