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“Seems people really moved their Bitcoin out of extreme caution after the coldcard hack,” Moreno said.
Small Bitcoin transactions tell a similar story. According to CryptoQuant, the combined volume of all transfers smaller than 1 BTC reached 39,600 BTC on Friday, just shy of the 39,900 BTC moved on November 16, 2022, the day after FTX filed for bankruptcy.
“The Bitcoin plebs had not moved this amount of BTC in a day since the FTX collapse,” Moreno said, adding that he liked to see people “taking action.”
Blockchain sleuth Timechainindex made a similar observation, noting that total net inflows to exchanges totaled 11,163 BTC on July 31, most of which flowed into major exchanges and firms like Binance, River, Kraken, and OKX.
“These are plebs who are scared,” the handle said on X, explaining the nature of the BTC inflow.
The total number of BTC held in wallets tied to centralized exchanges has increased to 2.715 million from 2.703837 million before the Coldcard exploit.
Reverse of FTX
Following FTX’s failure, the dominant risk was exchange insolvency and withdrawal freezes. Holders responded by moving bitcoin into self-custody, reducing exchange balances.
The current episode centers on self-custody risk associated with a single hardware wallet. The vulnerability has prompted some holders to temporarily shift smaller balances onto exchanges.