A Week of Very Bad News for Bitcoin
By any normal standard, bitcoin should be falling. The Coldcard hardware wallet theft has topped $116 million, with waves of drains continuing since the exploit surfaced on July 30. Michael Saylor’s Strategy disclosed it sold 1,638 $BTC for about $104.7 million (its third sale of the year) while wallets linked to the company moved another 1,030 $BTC on Wednesday, stoking fears of a fourth.
In Washington, the Clarity Act’s cloture vote is set to fail after Senate Democrats balked over ethics talks, and Polymarket odds on the bill becoming law in 2026 slid from 27% to 23% (as of today).
Yet through all of it, bitcoin has refused to break, with its price continuing to hover around $64,000, down sharply from its highs, but stubbornly stable in the face of a news cycle that has been almost uniformly hostile.
Mapping the Attack in Real Time
The Coldcard exploit remains the week’s ugliest story. A firmware bug dating to March 2021 caused certain devices made by Canadian manufacturer Coinkite to generate recovery seeds with roughly 40 bits of entropy instead of 128, leaving long-term holders exposed to brute-force sweeps. Bitcoin.com News published a full breakdown of who lost coins and who remains at risk.
The attack is still live and now it is being tracked in public. Bitcoin developer James O’Beirne has launched a live dashboard mapping the ongoing theft, seeding the network with tripwire unspent transaction outputs (UTXOs) built on the broken default seeds with varying levels of added entropy. The results have been chilling given that his control wallet with no added entropy was swept within an hour, proof the attackers are scanning the vulnerable seed space continuously.
Coinkite has halted shipments and destroyed its remaining inventory manufactured with the vulnerable firmware, telling customers: “Money that took years to save, gone. Trust that took years to build, broken.” The company has urged users on affected devices to move their funds to fresh wallets immediately, warning that a firmware update alone does not remove the risk. A fourth wave of drains moved 388.9 $BTC (roughly $29 million) in a single Sunday evening.
What a Bottom Might Look Like
The bulls seem to have a valuation anchor with Capriole Investments founder Charles Edwards alluding to bitcoin’s production cost (the all-in cost for miners to produce one coin), highlighting that it currently sits at $54,000, with the metric’s electrical component logged at $40,000.
Historically, prices have dipped below production cost in every cycle bottom, meaning the current $64,000 tape still trades at a premium, but the floor beneath it is well-defined.
Lastly, exchange inflows spiked as frightened Coldcard users moved coins, while Strategy has $5 billion in authorized sales remaining. If that wasn’t enough, a failed Clarity vote this week is looking to deliver one more headline blow before the August recess (potentially toppling bitcoin’s value once again).
