Bitcoin long-term holder supply drops 210,000 BTC after Coldcard breach

Bitcoin long-term holder supply fell by roughly 210,000 BTC over the past week to about 14.7 million, the sharpest weekly decline since December 2024, when the token first approached $100,000.

Glassnode, which classifies long-term holders as entities whose coins have remained dormant for about 155 days, said the cohort's supply stood just under 15 million BTC before the Coldcard incident, near an all-time high. The movement comes with bitcoin trading around $64,000, roughly 50 percent below its October record high.

The breach stemmed from weak randomness in affected Coldcard firmware, which let attackers reconstruct some users' wallet recovery phrases and drain their bitcoin. Thousands of addresses were affected, with estimated losses reaching as much as $114 million. Coldcard urged affected users to generate new wallets and move their funds, because updating the firmware alone cannot secure keys that may already be compromised, according to CoinDesk.

Some of the decline reflects users transferring bitcoin into newly generated wallets with stronger custody arrangements, while others are moving assets to regulated custodians or spot bitcoin ETFs as they reconsider the risks of self-custody. U.S. spot bitcoin ETFs attracted roughly $754 million over the past week, with BlackRock's iShares Bitcoin Trust (IBIT) accounting for most of those inflows.

Historically, heavy spending by long-term holders has coincided with market tops. Similar distribution waves occurred around the peaks of March 2021, March 2024 and December 2024, as experienced holders took profits into rising demand. This time the movement is happening near the lows, and bitcoin did not make new lows following the hack.

The number of active bitcoin addresses rose to approximately 980,000 per day, its highest level since December 2024, according to Glassnode. The analytics firm characterized the surge as an operational security response rather than evidence of improving market conviction.

The crucial distinction is that on-chain movement does not necessarily mean selling. In this case, the decline in long-term holder supply may be capturing a broader migration in bitcoin custody rather than a straightforward loss of conviction.

The episode tests whether the market can separate sustained distribution from a one-off reshuffling of older coins. If long-term holder supply stabilizes in the coming weeks, the move will look like a temporary custody shift; if it keeps falling, it would mark the first sustained drawdown of seasoned supply at a market low, a pattern traders will watch for signs of genuine selling pressure.

This article is for informational purposes only and does not constitute investment advice.