Glassnode data shows that 210,000 Bitcoin worth $13.4 billion moved out of long-term holder wallets in the last seven days. This figure marks the largest movement of dormant coins since December 2024, a period when the asset first touched the $100,000 threshold.
The long-term holder (LTH) category includes entities that leave their coins unmoved for at least 155 days, or more than five months. Before this week’s wave of transfers, the total LTH supply was close to touching an all-time high of around 15 million BTC. That supply has now instantly depleted to 14.7 million BTC due to mass panic.
Based on historical trends, waves of coin distribution from long-term entities generally occur at market peaks, such as during the cycles of March 2021, March 2024, and December 2024. The current situation is quite the opposite. The fund transfers are occurring at a low point while Bitcoin is trading at $64,000, about 50% cheaper than its record peak last October.
Security Exodus, Not a Sell-Off
Analysts dismiss assumptions that this coin movement is a form of profit-taking by large investors. This outflow is confirmed to be a mass storage migration following a security crisis with Coldcard hardware wallets.
The panic stems from a weak randomization method in Coldcard’s firmware, which allowed external parties to reconstruct users’ secret seed phrases. The estimated losses due to this security flaw are projected to reach $114 million. Updating the firmware has proven ineffective at resolving the risk, prompting Coldcard to urge its users to create new wallets and immediately empty their balances.
Amid this evacuation flow, the hacker exploiting this vulnerability continues to maneuver to obscure their tracks. According to monitoring by the on-chain analytics account @lookonchain on X, the Coldcard hacker holding 2,055 stolen BTC worth $130 million has become active again. Reports note that the perpetrator just moved 30.185 BTC worth $1.94 million to a new wallet address.
Where Are These Assets Flowing?
This multi-billion dollar exodus has forced investors to seek safer havens. Analysts project that some long-term holders are beginning to rely on regulated custodians or ETF products, leaving behind the self-custody risks that have just been compromised.
The pattern of institutional capital inflows strengthens this projection. Spot Bitcoin ETFs on US exchanges absorbed up to $754 million in fresh funds in the past week alone. The IBIT product managed by BlackRock took the largest share of this overall capital flow.
This disaster deals a heavy blow to the principle of crypto self-custody. When vault walls are proven to have factory defects, Bitcoin long-term holders are forced to rethink who is now more worthy of holding their assets. Reported from CoinDesk.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
