Bitcoin’s latest slump is not being driven by one event alone. A security scare tied to a hardware wallet, softer demand through spot exchange-traded funds, and fresh selling from Strategy have combined to keep pressure on price and sentiment.

The wallet exploit that rattled confidence

The most immediate concern is the Coldcard incident. Coinkite, the maker of the device, warned that only users whose seed phrases were created on certain vulnerable firmware versions may be exposed. That distinction matters, because this is not a universal failure of all Coldcard wallets; it is a narrower but still serious risk affecting a specific group of holders.

The losses have built in waves, and each new round has deepened the sense of urgency. Reports first put the damage near $40 million in BTC, but the total has since climbed much higher. Current estimates place the drain at 1,367.05 BTC, or roughly $88.6 million. Alex Thorn, who leads firmwide research at Galaxy Digital, said he identified a fourth coordinated wave and noted that the transaction pattern matched the shape of vulnerable Coldcard UTXOs. He also estimated that about 449 BTC could still be exposed in that wave alone.

• Initial losses were reported at nearly $40 million in BTC.
• Two more attack waves followed the first disclosure.
• Total losses later reached 1,367.05 BTC, worth about $88.6 million.
• Thorn said the activity strongly suggested another organised strike.
• His advice to affected users was simple: move funds off vulnerable wallets without delay.

Beyond the direct theft, the event has damaged market confidence. Santiment reported that Bitcoin’s positive-to-negative sentiment ratio across X, Reddit, and Telegram fell to its lowest level since the firm began tracking social mood. That is important because deep pessimism often appears when short-term traders are already losing conviction.

ETF flows have lost momentum again

Spot Bitcoin ETF demand has also been uneven. June was the weakest month on record for the category, which made the early July rebound look encouraging. The first week of that month brought nearly $200 million in net inflows, suggesting that institutional buyers were stepping back in after a weak stretch.

That strength did not hold cleanly. Inflows slowed by the middle of the month, then picked up again during a stretch of seven consecutive days of net inflows between July 14 and July 22. That was the longest positive run since April. Since then, however, net outflows have returned and erased much of that progress. SoSoValue has not yet released August flow figures, so the latest direction remains unconfirmed.

• June marked the weakest month so far for spot Bitcoin ETFs.
• July began with almost $200 million in net inflows.
• Mid-month gains faded before a seven-day inflow streak developed.
• Outflows resumed after that streak ended.
• August flow data is still unavailable.

This matters because spot ETFs are the main route for regulation-conscious capital. Pension funds, hedge funds, and other large allocators often prefer them because they provide exposure without direct custody. In a week marked by a wallet exploit, that preference can become even more pronounced for issuers such as BlackRock, Fidelity, Bitwise, and Franklin Templeton.

Strategy adds a fresh supply-side wrinkle

Corporate treasury activity has added another source of pressure. Michael Saylor, the co-founder and executive chairman of Strategy, announced that the company raised its USD Reserve by $250 million and completed an $81 million buyback of STRC shares. Buried beneath those headlines was a more market-sensitive detail: the company sold 1,637 BTC for about $105 million between July 27 and August 2.

That sale reduced Strategy’s holdings from 843,775 BTC to 842,138 BTC. The change is small relative to its massive treasury, but it stands out because Strategy has long been viewed as one of Bitcoin’s most consistent corporate buyers. Even a modest sale can matter when the broader market is already dealing with weaker sentiment and softer ETF absorption.

What the price action is signalling

Bitcoin has continued to trade under pressure, with the spot price sitting near $63,600 and the weekly move showing a decline of roughly 1% according to CoinGecko. The combination of a security event, slower institutional inflows, and a corporate sale helps explain why buyers have been hesitant to chase the price higher.

Seasonal tendencies add another layer. August has historically been a weak month for Bitcoin, ending lower in 9 of the past 13 years. That record does not guarantee another down month, but it does reinforce the case for caution when several bearish factors are already in place.

• Spot price: about $63,600
• Weekly change: roughly down 1%
• Seasonality: August has closed lower in most recent years
• Market backdrop: exploit damage, weaker ETF support, and Strategy selling

For now, Bitcoin’s near-term path looks sensitive to whether the security fallout fades, ETF inflows stabilise, and large holders stop adding supply to a market that is already cautious.