Bitcoin Exchange-Traded Funds See Spike In Inflows Following Huge Hack

American Bitcoin exchange-traded funds have had their biggest weekly inflow since April, taking in $850 million last week, according to Bloomberg figures.

The major U.S. funds managed by BlackRock, Fidelity, Grayscale, Morgan Stanley and others have received the cash the week after hackers targeted Coinkite’s popular Coldcard product.

Hackers started stealing millions in Bitcoin from Coldcard wallets after discovering a vulnerability in the product’s software. Some estimates put the amount of Bitcoin lost now at over $130 million.

The incident has rattled the $BTC community that typically praises cold storage solutions.

Speaking on Bloomberg’s ETF IQ show on Monday, Robert Mitchnick, global head of digital assets at BlackRock, said that since the ETFs’ approval in 2024, investors have wanted a “very simple turnkey trusted vehicle and not have to worry about all the unique elements of Bitcoin and crypto security that generally custody otherwise would require of an investor.”

Speaking about the Coldcard hack, he added: “What’s also important to recognize is that that is not a breach of Bitcoin or any other crypto protocol — those are individual security mismanagement issues that happen from various individuals or providers.”