Coldcard Firmware Bug Drains $116M as Bitcoin Holds Near $64,000

A firmware flaw in Coldcard hardware wallets has cost holders more than $116 million since July 30. Bitcoin, somehow, hasn’t flinched.

The breach traces back to a bug in devices made by Coinkite. The flaw created insufficient entropy in recovery seeds, which basically left wallets open to brute-force attacks. Attackers have been systematically scanning the compromised seed space ever since the exploit surfaced. Bitcoin developer James O’Beirne built a live dashboard to track the ongoing drain — and it’s still moving. Coinkite has acknowledged the firmware bug dates back to March 2021, which means affected wallets sat exposed for years before anyone caught it. The company has stopped shipping affected devices and destroyed remaining inventory. A firmware update alone, they warned, won’t fix the problem. Users need to move funds to entirely new wallets. Their statement didn’t sugarcoat things: “Money that took years to save, gone. Trust that took years to build, broken.”

Exchange inflows jumped as Coldcard users scrambled to find safer storage.

That surge in inflows is worth watching. It’s not panic selling exactly, but it’s not calm either. Users pulling funds off compromised hardware and routing them through exchanges adds activity to the market — and market activity can cut both ways. Some of that Bitcoin probably gets parked in new cold storage. Some of it probably gets sold. The net effect on price has been murky so far, but the sheer scale of the breach — $116 million and climbing — means the market is absorbing real stress here.

Strategy Sells Again, More May Follow

Michael Saylor’s Strategy has been moving Bitcoin too, though for different reasons. The company recently sold 1,638 BTC for roughly $104.7 million. Separate wallets tied to Strategy also moved another 1,030 BTC, which sparked fresh concerns about further liquidations. It’s the third sale of the year for the firm. And there’s $5 billion still authorized for future sales — so this probably isn’t the last one.

Strategy selling isn’t new. But the timing, stacked on top of the Coldcard breach and a shaky legislative picture in Washington, gives market participants more to chew on than usual. The company’s sales can shift sentiment fast, especially when other pressures are already in play.

Still, Bitcoin traded between $63,300 and a session high of $64,360. A minor 0.8% gain on the day. Support held above $63,500.

Pretty resilient, all things considered.

See also: Coldcards $100M Hack Exposes 40-Bit Entropy Flaw Across 126 Addresses

Clarity Act Cloture Vote Looks Shaky

Washington isn’t making things easier. The Clarity Act — a key piece of crypto legislation — faces a procedural wall. Its cloture vote is likely to fail, with Senate Democrats raising ethical concerns about the bill. The probability of it becoming law in 2026 dropped from 27% to 23%. Not a cliff, but a slide in the wrong direction.

The August recess is coming. If the cloture vote falls short before lawmakers leave town, the bill loses momentum at a critical moment. Market participants are watching closely for any sign that legislative priorities might shift — or stall entirely. Regulatory uncertainty is never great for crypto prices, even when Bitcoin is holding its own on the charts.

That said, Bitcoin’s floor has some structural support. Charles Edwards of Capriole Investments pegged the electrical cost of mining one Bitcoin at $40,000, with the total production cost sitting around $54,000. Historically, Bitcoin’s price has only dipped below those production costs during genuine market bottoms. Right now, at $64,000, there’s a buffer. Not a guarantee — but a buffer.

Hardware Wallet Trust Takes a Hit

The Coldcard incident is one of the bigger hardware wallet failures the industry has seen. Hardware wallets exist precisely because people don’t trust exchanges or software wallets with large holdings. The pitch is simple: keep your keys offline, keep your Bitcoin safe. When that promise breaks — especially through a firmware bug sitting undetected for years — it rattles confidence in a way that goes beyond the dollar figure.

$116 million is a lot. But the harder number to quantify is how many holders are now second-guessing their storage setup. Coinkite’s decision to destroy remaining inventory and halt shipments is the right call, but it can’t undo the damage already done to wallets that were never updated or migrated. The attack is still active. O’Beirne’s dashboard is still ticking.

More context: Coldcard Wallet Hack Tops $100M as Galaxy Research Flags 7,300 Breached Addresses

And Coinkite’s own words probably hit harder than any analyst note: “Money that took years to save, gone.”

The market absorbed all of it — the hack, Strategy’s sales, the legislative uncertainty — and Bitcoin sat at $64,000. Unclear how long that holds if any of these pressures escalate, but for now the price isn’t breaking. Strategy still has $5 billion in authorized sales sitting on the table.