Coldcard Bitcoin Loss Estimate Rises to $70M After Galaxy Analysis

Key Point

Galaxy Research identified 1,196 addresses linked to the Coldcard wallet incident that lost 1,082.65 Bitcoin, worth about $70.2 million at the time of the transactions. Galaxy Research traced the Bitcoin movements between 1:10 AM and 1:51 AM UTC on July 30 across blocks 960,183 to 960,191. AnchorWatch CEO and co-founder Rob Hamilton had earlier estimated that 594.48 Bitcoin moved across 500 transactions within a three-block window. Galaxy Research said the transactions shared identical 30 satoshis per virtual byte fees and no change outputs. Coinkite co-founder Rodolfo Novak said Coinkite released a hotfix to remove the software fallback path, but the update does not protect seeds generated on vulnerable firmware.

Why it matters: A firmware bug may force affected users to rotate seeds because wallet security depends on safe seed generation.

Market Sentiment

Bearish, Stress-on, Tech-driven, Fear.

Reason: The higher Coldcard loss estimate points to direct self-custody security risk.

Similar Past Cases

In June 2023, Atomic Wallet users lost more than $35 million in a wallet compromise, which showed how wallet-level failures can create large user losses without an exchange failure. (Fortune) Difference: Atomic Wallet was a software wallet case, while the Coldcard incident is framed as a firmware bug affecting generated seeds.

Ripple Effect

The main channel is trust in self-custody hardware and seed-generation workflows. If similar on-chain fingerprints appear from other generated addresses, then confidence pressure could widen across wallet providers. If future attacks avoid the same fingerprint, then detection may become harder.

Opportunities & Risks

Opportunities: If Coinkite defines the full scope of vulnerable firmware, then waiting for scope clarity before adding funds to Coldcard-generated addresses limits operational risk. When users generated seeds on vulnerable firmware, then moving funds to a new seed is the primary risk-reduction step identified by Novak.

Risks: If future attacks do not follow the same on-chain fingerprint, then relying on the identified fee and change-output pattern may miss exposure. Reducing reliance on unchanged vulnerable seeds limits downside if the firmware issue proves broader than current tracing shows.