Bitcoin ETFs Enjoy Stronger Inflows Following Crypto Hack

Bitcoin exchange-traded funds (ETFs) are reportedly seeking stronger inflows following a recent crypto hack.

The U.S.-listed ETFs, which provide investors with exposure to bitcoin’s price without requiring them to hold the coins themselves, drew more than $850 million last week, Bloomberg News reported Monday (Aug. 10).

These inflows, the highest level since April, came after the revelation of a breach involving Coldcard wallets made by Coinkite that drained about $130 million in bitcoin. According to Bloomberg, this has led some analysts to argue investors could be seeking the shelter of regulated ETFs.

“The Coldcard hack could make spot Bitcoin ETFs a more appealing option for some investors, including even some longtime Bitcoin holders,” said Eric Balchunas, senior ETF analyst at Bloomberg Intelligence.

As Bloomberg noted, cold wallets have historically been seen as one of the safest methods of digital asset storage. These devices are kept offline and designed to make crypto less susceptible to cyberattacks.

But in the case of Coinkite, a flow in the company’s firmware made it easier for attackers to predict security information, allowing them to take control of affected wallets and steal crypto without accessing the Coldcard devices.