Coldcard’s $89M wallet bug triggers the biggest Bitcoin movement since FTX and completely distorts market signals

Coldcard’s wallet crisis has shaken Bitcoin sentiment, blurred on-chain signals and exposed a recurring weakness in AI-assisted cyber defenses.

On July 30, hardware maker Coinkite warned users that wallets generated with affected Coldcard firmware could be drained because a software error produced seed phrases with far less randomness than intended.

This security incident, Galaxy Research said, resulted in three suspected attack waves that targeted 4,585 addresses and drained 1,367.05 BTC, worth about $89 million.

The Bitcoin associated with the three identified waves remains in attacker-controlled addresses, according to Alex Thorn, Galaxy Digital’s head of firmwide research.

However, he said smaller opportunistic thefts were already moving through peel chains, cross-chain services and offshore casinos.

Coldcard migrations blur Bitcoin’s bearish signals

This escalating threat has pushed potentially exposed users to move their Bitcoin before attackers reach it.

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