Bitcoin exchange-traded funds in the United States recorded their largest weekly inflow since April, adding $850 million last week, according to data compiled by Bloomberg.
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AAPLMajor inflows after Coldcard hack
The surge in investment came in the wake of a high-profile security breach that impacted Coldcard wallets, a popular hardware solution for storing Bitcoin offline. Hackers exploited a software vulnerability, resulting in losses estimated at more than $130 million in Bitcoin.
Funds managed by prominent Wall Street institutions such as BlackRock, Fidelity, Grayscale, and Morgan Stanley saw significant demand. The influx took place shortly after reports detailed the Coldcard vulnerability and its consequences for affected users.
Security concerns have rattled the Bitcoin community, which typically promotes cold storage as the safest way to safeguard digital assets over the long term. Industry observers have been monitoring whether some investors are opting to shift digital assets from self-custody to regulated ETFs after the incident.
Mini dictionary: Coldcard, a hardware wallet manufactured by Coinkite, is designed for secure offline storage of Bitcoin. It is widely used for its focus on advanced security features and air-gapped signing, allowing users to keep private keys offline and away from potential online threats.
Industry response and investor behavior
Robert Mitchnick, global head of digital assets at BlackRock, stated during an appearance on Bloomberg’s ETF IQ program that demand continues to be driven by a need for straightforward and trusted investment exposure to Bitcoin. He explained that investors seek out vehicles that do not require navigating the technical and security complexities associated with private key management.
BlackRock has observed that ETF investors increasingly prefer to buy and hold Bitcoin for the long term, even during recent market downturns. According to Mitchnick, “What’s also important to recognize is that that is not a breach of Bitcoin or any other crypto protocol — those are individual security mismanagement issues that happen from various individuals or providers.”
While it remains unclear whether recent flows were directly caused by redemptions from cold storage following the hack, the spike in ETF trades suggests an increased appetite for institutional-grade products during periods of heightened uncertainty.
ETF performance and market impact
Despite notable inflows, Bitcoin’s price remained largely unchanged over the past seven days and is now trading at $63,861. Historically, significant investment into spot ETFs has coincided with upward price movements, but recent data shows the world’s largest digital currency holding steady during the latest round of allocations.
BlackRock’s iShares Bitcoin Trust led last week’s inflows, while funds operated by Morgan Stanley and Fidelity also attracted substantial trading activity. These ETFs provide U.S. investors with regulated exposure to Bitcoin without the need to directly manage wallets or private keys.
Since receiving approval from the Securities and Exchange Commission in 2024, these U.S.-domiciled spot Bitcoin ETFs have seen rapid adoption and now collectively manage nearly $80 billion in assets, according to data from Coinglass.
| ETF Provider | Recent Inflows (weekly) | Total Assets Managed |
|---|---|---|
| BlackRock | Largest among peers | Included in $80 billion total |
| Fidelity | Significant | Included in $80 billion total |
| Morgan Stanley | Significant | Included in $80 billion total |
The launch of these funds marked one of the most successful rollouts in ETF history, opening the market to investors who previously hesitated over the technical and security aspects of holding Bitcoin directly.
By allowing direct participation through conventional brokerage platforms, these products have sought to ease concerns around custody risks, especially in the aftermath of incidents affecting cold storage providers.
Investors now have the option to purchase shares in Bitcoin ETFs that are listed on public stock exchanges, providing an alternative to handling private keys and hardware wallets.
