Bitcoin rose above $65,170 on Friday, marking an upswing of nearly 4% over the past week, even as the cryptocurrency market faced pressure from a major wallet exploit and regulatory uncertainties in the United States.
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AAPLColdcard wallet exploit exposes vulnerabilities
Last week, hackers exploited a significant vulnerability in the Coldcard hardware wallets, a product manufactured by Canadian firm Coinkite, compromising the security of numerous Bitcoin holders.
The attackers targeted weak private keys generated by the wallet’s firmware. Since the breach, over $130 million worth of Bitcoin has been stolen, according to estimates from industry watchers, causing widespread concern among users who have trusted cold storage solutions for added security.
The incident has prompted many Bitcoin owners to move their assets to alternative storage solutions, including exchanges, as they seek to protect their holdings from further risk.
Mini dictionary: Coinkite, a Canada-based company, designs and produces Bitcoin hardware wallets such as Coldcard, which are specialized devices intended to provide enhanced security for cryptocurrency storage by allowing users to manage their private keys offline.
Hackers have been able to steal millions in Bitcoin from Coldcard wallets after finding a firmware vulnerability that allowed them to exploit weak private keys, leading cautious holders to reevaluate their storage strategies.
Clarity Act delay adds regulatory uncertainty
On Thursday night, lawmakers in the U.S. announced a delay for the much-anticipated Clarity Act, a bill aimed at establishing clearer digital asset regulations. The bill’s vote has now been pushed to September as Congress enters recess, creating further uncertainty over the regulatory landscape for digital assets in the country.
Had the bill passed, it was expected to provide crucial guidance for the crypto market and potentially encourage stronger institutional participation in Bitcoin and other cryptocurrencies.
The postponement follows several months of debate among lawmakers, reflecting ongoing discussion about how best to oversee the evolving digital asset sector.
ETF inflows fuel Bitcoin price gains
Despite the recent challenges, Bitcoin has largely shrugged off the negative headlines, buoyed by strong inflows into spot exchange-traded funds (ETFs). Investor demand for ETF shares, particularly BlackRock’s iShares Bitcoin Trust and Morgan Stanley’s newly launched Bitcoin fund, contributed to the latest price rally.
Data from Farside Investors indicates that Bitcoin-based ETFs collectively received $763.6 million in new capital since the start of the week. These inflows signal that many investors remain confident in the asset’s long-term prospects, regardless of near-term setbacks.
| ETF Provider | Recent Inflows (this week) |
|---|---|
| BlackRock iShares Bitcoin Trust | Significant |
| Morgan Stanley | Significant |
| All Bitcoin ETFs (Total) | $763.6 million |
ETFs managed by other major firms such as Fidelity and Grayscale have also reported a strong influx of assets, continuing the trend of institutional adoption in the space.
Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, observed that the inflows may not be directly tied to the Coldcard incident, yet he noted it would be reasonable for investors to prefer regulated funds during periods of heightened security concerns.
Bitcoin’s price has strengthened as investors have increased their exposure to ETFs, with over $763 million in new capital flowing into these products in just one week.
