What’s on the blockchain
A major change in the way bitcoin is moving on the blockchain has come to light after a recent issue with Coldcard’s firmware. Over the past seven days, approximately 210,000 BTC have left wallets held by long-term investors, marking the largest drop since late 2024. According to tracking from Glassnode, long-term holders are users who have not moved their coins in about 155 days, which is slightly more than five months. These holders are typically seen as more stable and less influenced by day-to-day market swings. Their behavior is often viewed by analysts as a sign of deeper market trends and confidence.
Before the Coldcard event, the total supply of coins in these long-term wallets was nearly 15 million BTC, a number close to a record. After the recent shift, it has now dropped to about 14.7 million BTC. While this is not the first time such a movement has taken place, it is different in one key way. In the past, similar large movements usually took place when the market was hitting highs, as in March 2021, March 2024, and again in December 2024. In those cases, more experienced investors often moved assets to take profits during rising markets. However, this time the movement is happening at a time when the price of bitcoin is nearly 50% below its peak, sitting at around $64,000 as of the latest data.
What the hack actually did
The breach was caused by a flaw in the firmware used by Coldcard, allowing attackers to reconstruct some users' wallet recovery phrases. This weakness led to thousands of Coldcard wallets being compromised, with losses estimated to be as high as $114 million. In response, Coldcard advised its affected customers to create new wallets and transfer their funds, because simply updating their software would not be enough to protect their keys, which may already be exposed. As a result, a large portion of the bitcoin moved in the last week likely came from users taking steps to better secure their assets in new, more resilient environments.
The movement is also linked to a recent surge in U.S. spot bitcoin ETFs, which brought in roughly $754 million during the same timeframe. Of that amount, the iShares Bitcoin Trust (IBIT), managed by BlackRock, was the biggest recipient. While these ETFs have clearly seen increased activity, they are not the full reason behind the 210,000 BTC movement on the blockchain. Instead, many users have taken the opportunity to switch their custody models in light of the Coldcard breach, which has raised concerns about the risks of keeping bitcoin in self-custody.
What it means for the market
This large-scale movement of funds is a sign that many investors are re-evaluating how they hold their bitcoin. Some are moving their coins into more secure, newly generated wallets, while others are choosing to place their assets under third-party custodians like regulated exchanges or ETF providers. This change in strategy reflects a growing awareness of the risks involved in self-custody, especially after an event like the Coldcard breach. Despite the large amount of bitcoin being moved, the price did not drop further, suggesting the market absorbed the situation without a major downturn.
What this shows is not a loss of faith in bitcoin itself, but a shift in how people choose to store and protect their holdings. The Coldcard incident has served as a wake-up call for many users, prompting them to take their security seriously and consider more robust custody solutions. As a result, the blockchain is witnessing a broader realignment in user behavior, with a stronger focus on security and trust in external custodians.