Bitcoin Investors Flee to Big Wall Street Funds After $130M Hack

A major hack has pushed nervous Bitcoin owners toward big, established Wall Street firms — and the numbers are eye-popping.

Last week, hackers found a weakness in Coldcard, a popular "hardware wallet" (a small physical device, like a USB stick, that stores your Bitcoin offline for extra safety). The flaw let attackers guess users' secret passwords and steal their coins.

The damage so far:

• Over $130 million in Bitcoin has been stolen
• Millions more is being drained every day since the attack
• The bug traces back to a 2021 software mistake that skipped a key security chip

After the news broke, many investors decided they'd rather let big professional firms guard their Bitcoin. They rushed into spot Bitcoin ETFs — these are funds that trade on the stock market and track Bitcoin's price. Buying an ETF (Exchange-Traded Fund) lets people invest in Bitcoin without dealing with the tricky, risky job of storing it themselves.

Where the money went:

• A total of $626 million in fresh cash flowed into U.S. Bitcoin ETFs after the hack
• Funds are run by giants like BlackRock, Fidelity, Grayscale, and Morgan Stanley
• BlackRock's iShares Bitcoin Trust (IBIT) grabbed the biggest share
• All these ETFs together now hold $77.8 billion in assets

One expert, Bloomberg's Eric Balchunas, joked about the difference between trusting a "5-man boutique in Canada" (Coldcard's maker) versus a 25,000-employee, $15 trillion company like BlackRock. His point: big traditional finance firms suddenly look a lot safer.

The takeaway: When storing your own crypto goes wrong, it can be a disaster — you may never get your money back. This hack is pushing everyday investors to hand security over to trusted professionals, boosting the appeal of Bitcoin ETFs.

This is an AI-generated summary. Read the original article at: https://bitcoinmagazine.com/news/bitcoin-etf-inflows-surge-following-hack