Bitcoin ETFs See $1B in Inflows Amid Coldcard Hack Fallout

In the wake of a massive hack affecting Coldcard hardware wallets, spot Bitcoin exchange-traded funds (ETFs) have seen a remarkable influx of nearly $1 billion in investments. Major funds, including BlackRock's iShares Bitcoin Trust, have been the primary beneficiaries, with BlackRock alone attracting approximately $757.5 million over a week.

The Coldcard hack, which exploited a firmware vulnerability, has raised serious concerns about the security of self-custody solutions, prompting investors to seek the perceived safety of regulated ETFs. The hack is estimated to have drained between $114 million and $130 million from over 5,200 wallets, leading to a shift in investor sentiment.

Despite analysts cautioning against directly linking the hack to the surge in ETF inflows, the incident has undeniably made traditional financial products appear more attractive to those previously hesitant about Bitcoin investments. As investors look for secure options, the concentration of inflows into BlackRock’s iShares Bitcoin Trust highlights its growing dominance in the market.

Overall, the recent events underscore the ongoing challenges in the cryptocurrency space regarding security and investor confidence, as well as the evolving landscape of Bitcoin investment vehicles.

New Developments in the Bybit Hack Case

• Hack Date: February 21, 2025 - The largest crypto theft on record.
• Preliminary Injunction: Issued approximately 532 days after the hack, blocking unnamed defendants from moving or selling stolen crypto.
• Frozen Funds: Industry coordination led to the freezing of $42.9 million shortly after the theft.
• Recovery Efforts: mETH Protocol recovered about 15,000 cmETH, valued at nearly $43 million, contributing to a total early save of approximately $85.9 million (5.9% of the stolen amount).
• Laundering Cycle: DPRK-linked groups typically launder stolen funds within a 45-day window.
• Stolen Funds Movement: Over $1 billion of the stolen crypto had already moved through laundering channels before the injunction was issued.
• Future Implications: The injunction may only cover a small portion of the remaining assets, with most of the stolen funds likely laundered before legal actions could take place.
• North Korean Cyber Operations: The US Treasury Department has designated Lazarus Group and other entities as being controlled by North Korea, which has reportedly stolen over $2 billion in crypto in 2025 alone.

Recent Developments in Bitcoin and Ethereum ETFs

• US-listed spot Bitcoin and Ethereum ETFs attracted over $1 billion in inflows, marking their strongest week since April.
• Spot Bitcoin ETFs alone pulled in $853.54 million, with inflows recorded every day of the week.
• BlackRock's iShares Bitcoin Trust accounted for approximately $693 million of the total inflows, representing over 80% of the new money entering Bitcoin funds.
• Since their launch in January 2024, Bitcoin ETFs have amassed over $52 billion in cumulative net inflows, managing about $80 billion in net assets.
• Following a security breach affecting Coldcard hardware wallets, researchers estimated that around 1,816 BTC, valued at approximately $116 million, were stolen from over 5,200 addresses starting July 30.
• Ethereum ETFs also saw significant inflows, totaling $244.94 million for the week, extending their streak of weekly inflows to five consecutive weeks.
• BlackRock's iShares Ethereum Trust attracted roughly $203 million during the week, making it a key player in the Ethereum ETF inflows.

New Insights on Bitcoin's Institutional Bear Market

• Bitcoin's price peaked at $126,223 in October 2025, but dropped below $59,000 on July 1, 2026, recovering to around $64,000 by early August.
• The current cycle has seen a drawdown of 51% by June 9, 2026, making it the shallowest decline compared to previous bear markets.
• Spot Bitcoin ETFs experienced $4.21 billion in outflows in just three weeks by June 3, 2026, marking the largest redemption run of the year.
• BlackRock's IBIT fund maintained $47.48 billion in net assets as of August 4, 2026, with a median bid-ask spread of 0.03%.
• Bitcoin's historical volatility was recorded at 42% in 2025, significantly lower than its 2021 levels, indicating a shift in market dynamics.
• Realized capitalization fell by 1.45% over 90 days, highlighting ongoing market distress despite the lack of major institutional failures.

New Insights on Hyperliquid ETFs

Hyperliquid (HYPE) spot exchange-traded funds (ETFs) returned to net inflows in the week ending August 7, adding $2.84 million after three consecutive weeks of redemptions. This reversal follows a cautious outlook from JPMorgan, with cumulative net inflows now totaling $280.8 million.

HYPE ETFs, which launched in mid-May, experienced a significant decline last month, with a total outflow of $30.6 million peaking at $14.7 million for the week ending July 31. The price of HYPE fell from the low $60s in late July to around $54.75 by early August, marking a 29% decrease from its June 16 record of $76.87.

In the broader market, combined weekly inflows across major crypto ETFs approached $1.1 billion, with Bitcoin (BTC) ETFs leading the way with $853.5 million in inflows, reversing a previous outflow of $61.5 million. Ethereum (ETH) funds added $244.9 million, marking their strongest week since mid-April.

In contrast, smaller altcoin products saw reduced interest, with Solana (SOL) ETFs drawing only $145,000, down from $7.2 million two weeks earlier.

New Facts on Bitcoin ETF Inflows

• From August 3 to August 7, US spot Bitcoin ETFs experienced net inflows of $853.5 million.
• BlackRock’s iShares Bitcoin Trust (IBIT) accounted for $693 million of the inflows, representing 81% of the total.
• This inflow streak reversed a previous week’s outflows of $61.5 million, bringing cumulative net inflows to $52.18 billion since launch.
• Total net assets in US spot Bitcoin ETFs reached $79.50 billion, approximately 6.10% of Bitcoin’s market capitalization.
• Daily inflow figures during the five-day period were $170.1 million, $211.5 million, $244.4 million, $128.8 million, and $98.85 million.
• IBIT contributed $86.71 million on the final day of the inflow period.
• Fidelity’s FBTC was the second-largest contributor with $40.95 million.
• US spot Ethereum ETFs attracted $244.9 million in inflows during the same week, bringing total inflows for both Bitcoin and Ethereum ETFs to nearly $1.10 billion.