Coldcard breach custody migration is now visible on-chain. Long-term holders moved roughly 210,000 BTC over the past week.
This marks the largest decline since December 2024. Bitcoin approached $100,000 back then.
Why Coldcard breach custody migration matters
Glassnode classifies long-term holders as entities with coins dormant for 155 days. This cohort is often considered the market’s “smart money.” Its members tend to hold through short-term volatility.
Long-term holder supply now stands at approximately 14.7 million BTC. Before the Coldcard incident, it was just under 15 million. That was close to an all-time high.
Not profit-taking, but security response
Historically, heavy LTH spending coincides with market tops. Similar waves occurred in March 2021, March 2024, and December 2024. Experienced holders took profits into rising demand.
This time, the movement is occurring near the lows. Bitcoin is trading around $64,000. That is roughly 50% below the October all-time high.
This spending is not profit-taking. It is a migration in storage methods following the Coldcard incident. Bitcoin did not make new lows after the hack.
The breach stemmed from weak randomness in Coldcard firmware. Attackers reconstructed some users’ wallet recovery phrases. Thousands of addresses were affected. Estimated losses reached as much as $114 million.
Coldcard urged affected users to generate new wallets. Updating firmware alone cannot secure compromised keys.
Where the funds are going
Some of the decline reflects users transferring to new wallets. They are choosing stronger custody arrangements. Other holders may be moving to regulated custodians. Spot Bitcoin ETFs are also an option. Users are reconsidering self-custody risks.
ETF flows offer some support. U.S. spot Bitcoin ETFs attracted approximately $754 million over the past week. BlackRock’s IBIT accounted for most of these inflows.
The crucial distinction
On-chain movement does not necessarily mean selling. The decline in LTH supply may capture a broader migration. This is not a straightforward loss of conviction.