Coldcard flaw drains up to $70M in Bitcoin as social mood hits a record low

Social media chatter about leading cryptocurrency, Bitcoin, has plunged to the most negative depths on record in the immediate aftermath of the Coldcard hardware wallets exploit that drained an estimated 1,082 BTC, worth roughly $70 million, from affected users. 

The social sentiment readings tracked by Santiment confirmed the sour mood after a security event that affected almost 1,200 self-custody wallets.

Why the Coldcard wallet hack was a sucker punch

Crypto holders store their tokens on hardware wallets to safeguard them against the various operational and security risks that target centralized exchanges every day. In fact, the “Not your keys, not your crypto” phrase became popular after users lost access to their tokens after exchanges failed in the past. 

In essence, your crypto should be safe as long as your keys are securely stored. However, all of that logic failed in the Coldcard incident, which Santiment believes was enough to compound the historic breakdown in sentiment. 

In the first full day of trading since the Coldcard exploit, Santiment data logged positive Bitcoin commentary at its lowest level compared to negative posts. The Saturday reading is the worst the firm has recorded since it adopted its current tracking method across X, Reddit, Telegram and other social media platforms. 

Block traced the cause to a firmware build error present since Coinkite, the firm behind Coldcard, shipped version 4.0.0 from a code commit dated March 1, 2021. Coinkite patched the issue in release 4.21.

Did the Coldcard exploit affect Bitcoin price?

Ironically, Bitcoin price has held steady near $63,000 as of this Saturday report. The leading cryptocurrency ended July in the green even though it stepped back by about 1.3% over the last 24 hours, per CoinMarketCap data. 

Bitcoin maintaining above the $60,000 level represents a win for market watchers through a period where victims saw estimated losses climb from $38 million to $70 million. 

Cryptopolitan first reported the losses around 594 BTC (about $38 million) around the time the hack first happened. Those numbers went up sharply throughout the day, as Galaxy Research’s most recent estimate came in as $70 million lost from 1,196 addresses. 

What CZ and the market are watching next

Binance founder Changpeng Zhao weighed in on X, writing that “even hardware wallets can have bugs” and suggesting holders spread funds across several wallets, while adding that the approach carries its own risks and “nothing is 100%.” His post drew nearly 2,000 likes within hours.

For the market, the near-term question is the attacker’s consolidated stash. A large transfer toward an exchange could add short-term supply pressure. Traders are also eyeing whether Bitcoin holds $60,000; a sustained break could open the way toward $58,000, while a recovery of $64,000 would ease the immediate downside.

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