Coldcard exploit pushes Bitcoin sentiment to a historic low after weak seed randomness enabled the theft of as much as 1,082 BTC, worth about $70 million.
Santiment data showed that positive Bitcoin commentary fell to its lowest level against negative posts, even as the cryptocurrency stayed above $60,000.
The security breach affected nearly 1,200 self-custody wallets and unsettled holders who relied on hardware devices to protect their assets. Santiment said the event deepened a historic breakdown in social sentiment across X, Reddit, Telegram, and other platforms. The breach was particularly damaging to confidence since hardware wallets are intended to shield crypto assets from the operational and security threats that frequently affect centralized exchanges on a daily basis.
Coldcard Exploit Weakens Wallet Confidence
Hardware wallets are widely used to reduce operational and security risks linked to centralized exchanges. The phrase “Not your keys, not your crypto” gained popularity after users lost access to funds when exchanges failed.
That principle assumes assets remain secure when private keys are protected. However, the Coldcard incident challenged that belief after weak seed randomness exposed affected wallets.
During the first full trading day after the breach, Santiment recorded the lowest ratio of positive to negative Bitcoin discussion under its current tracking system. Saturday’s reading marked the weakest sentiment level the firm has logged.
Bitcoin sentiment reading for July 31. Source: Santiment
Block traced the problem to a firmware build error introduced when Coinkite, the company behind Coldcard, released version 4.0.0 from a code commit dated March 1, 2021. Coinkite fixed the flaw in release 4.21.
Bitcoin Price Holds Above the $60,000 Level
Bitcoin traded near $63,000 during Saturday’s report despite the worsening sentiment. The asset finished July higher, although it fell about 1.3 percent over the previous 24 hours, according to CoinMarketCap data.
Holding above $60,000 offered stability as estimated losses rose from $38 million to $70 million. Early reports placed the theft near 594 BTC, valued at about $38 million.
Later figures increased sharply. Galaxy Research estimated that 1,082 BTC, worth roughly $70 million, had been stolen from 1,196 addresses.
Market Watches the Attacker’s Bitcoin Holdings
Binance founder Changpeng Zhao commented on the breach on X. He wrote that “even hardware wallets can have bugs” and suggested that holders divide funds across several wallets.
Zhao also acknowledged that this approach creates separate risks and added that “nothing is 100%.” His post received nearly 2,000 likes within hours.
Market attention has shifted toward the attacker’s consolidated holdings and Bitcoin’s ability to defend $60,000. A transfer toward an exchange could increase short-term supply pressure.
Traders are also monitoring nearby price levels. A sustained move below $60,000 could expose $58,000, while a recovery above $64,000 would reduce immediate downside pressure.
