Bitcoin (BTC), 980,000 Addresses Surge...How Far Will Coldcard Fear Go?

▲ Bitcoin (BTC)

After the Coldcard security incident, Bitcoin (BTC) active addresses soared to their highest level in eight months. On-chain activity surged as users with seeds generated from vulnerable firmware moved their funds.

According to crypto media outlet Cryptopotato on August 7 (local time), Bitcoin active addresses recorded approximately 980,000 in a single day on July 31, the highest level since December 2024. Glassnode described this surge as “fear-induced on-chain activity.” Glassnode stated, “Holders replacing their seeds and moving funds to other storage methods is a response to operational security concerns, not a change in market confidence.”

Coin Metrics tallied 967,546 active addresses on July 31, 54% higher than the July average of 627,061. The previous high was 985,635 on December 10, 2024. Bitcoin held on exchanges increased by 22,135 BTC, from 2,654,863 BTC on July 29 to 2,676,998 BTC on August 3. Although it decreased to 2,667,058 BTC on August 5, approximately 12,200 BTC of the increase remained on exchanges.

Unlike the surge in active addresses, the number of transactions decreased. On July 31, Bitcoin network transactions totaled 607,581, falling below the July average of 656,321. On the same day, active addresses were 54% higher than the monthly average. On August 5, active addresses were still 730,433, approximately 16% above the July average, surpassing the average for seven consecutive trading days.

Coinkite, the Canadian company that developed Coldcard, announced that the randomness of seeds generated by Mk2 and Mk3 from firmware 4.0.1 to 4.1.9 was weakened. Mk4, Mk5, and Q devices also had seeds created before the corrected version with an entropy of approximately 72 bits, lower than the target of 128 bits. Coinkite advised users that already generated vulnerable seeds cannot be recovered by updating the firmware and recommended moving funds to new seeds.

The first theft occurred on July 30, targeting 1,324 UTXOs from approximately 500 single-signature addresses across four consecutive blocks, with 594.5 BTC stolen. The median loss per victim was 0.41 BTC, and the maximum single loss was 29.9 BTC. Galaxy Research tallied the confirmed stolen amount from approximately 7,300 addresses at 1,596 BTC, estimating it at 2,055 BTC when suspicious transactions are included. The confirmed damage exceeded $100 million last week. Santiment reported that bullish opinions on social channels were only 0.58 per bearish opinion, the lowest ratio since tracking began.

[Article Summary]

-Bitcoin active addresses surged to approximately 980,000 on July 31, marking the highest level since December 2024.

-Along with the movement of funds by users with vulnerable Coldcard seeds, Bitcoin holdings on exchanges also temporarily increased by 22,135 BTC.

-The confirmed theft related to Coldcard amounts to 1,596 BTC, with damages exceeding $100 million.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*