Bitcoin ETF Inflows Accelerate as Security Concerns Test the $65,000 Barrier

Bitcoin Holds Near a Critical Level as ETF Demand Returns

Bitcoin (BTC) entered the weekend near $65,000 after a difficult period for the cryptocurrency market, with price action increasingly centered on whether renewed institutional demand can overcome persistent resistance around $65,000 to $66,000.

The backdrop remains complicated. The Coldcard exploit resulted in more than $100 million in confirmed Bitcoin losses, with estimates suggesting total losses could exceed $130 million. Meanwhile, the CLARITY Act will not receive a Senate vote before Congress begins its summer recess. Despite those pressures, Bitcoin remained around the upper end of the $60,000-to-$65,000 range that has contained it since late June.

Key Points

• U.S. spot Bitcoin ETFs attracted about $853.5 million during the week ending Aug. 7, their strongest weekly inflow since April and roughly five times July's total inflows.
• Bitcoin held near $65,000 despite the Coldcard exploit, stalled progress on the CLARITY Act, and additional concerns involving BTCPay Server and the BIP-110 minority chain.
• The $65,000-to-$66,000 area remains central to Bitcoin price action after BTC spent much of the period since late June between roughly $60,000 and $65,000.

Bitcoin ETF Demand Returns After Weeks of Outflows

One of the clearest developments in Bitcoin market news was the return of capital to U.S. spot Bitcoin ETFs.

The funds attracted approximately $853.5 million across five consecutive positive sessions through Aug. 7, their strongest weekly performance since April. That compares with only about $170 million to $172 million of net inflows during all of July.

The rebound followed a much more difficult stretch. Investors had withdrawn approximately $8.26 billion from U.S. spot Bitcoin ETFs across eight consecutive weeks through early July, including $4.51 billion during June.

The latest inflows therefore represent a notable change in direction, although they recover only a fraction of the capital previously withdrawn.

BlackRock (BLK)'s iShares Bitcoin Trust, or IBIT, accounted for $693.7 million of the week's inflows, more than 80% of the total. Fidelity's FBTC added another $116.4 million.

The timing is also notable. By Friday morning, $754.69 million—or about 88%—of the week's inflows had already arrived. Wednesday was the largest inflow day, meaning most of the ETF demand preceded Friday's U.S. employment report.

That separates two important developments: ETF buying strengthened earlier in the week, while the weaker-than-expected jobs report coincided with Bitcoin's move through $65,000 on Friday.

Why Didn't the Coldcard Hack Push Bitcoin Lower?

Bitcoin's ability to hold near $65,000 came despite a major security incident involving Coldcard wallets.

The exploit began July 30 and involved wallets whose recovery seed phrases were generated with insufficient randomness. Estimates vary, but losses have been confirmed above $100 million, while some estimates put the total near $130 million across more than 7,700 wallets.

Crucially, the Bitcoin blockchain itself was not hacked. The vulnerability involved wallet security and private-key generation rather than Bitcoin's underlying network.

The distinction appears important to the market response. Bitcoin did not experience a major selloff following the disclosure and remained near the upper end of its recent trading range.

The incident nevertheless reopened the debate around self-custody versus institutional custody.

Long-term holders reportedly moved roughly 210,000 BTC during the week after the exploit, while transfers from private wallets to exchanges turned positive after July 31, reversing a longer-term trend toward moving coins away from exchanges.

At the same time, ETF inflows accelerated sharply and were concentrated in the two largest funds.

That timing has fueled discussion that some investors may increasingly prefer regulated investment vehicles that outsource custody. However, the available information does not establish a direct connection between coins affected by the Coldcard incident and ETF inflows.

Ethereum ETFs also attracted capital during the same period, which complicates the argument that the Bitcoin ETF surge was driven primarily by Coldcard-related custody concerns.

Bitcoin faced another security issue heading into the weekend when attackers exploited a vulnerability in BTCPay Server to obtain credentials controlling certain Lightning nodes running LND. BTCPay confirmed that funds had been stolen, although standard on-chain wallets generated within BTCPay were not affected.

Bitcoin's $65,000-$66,000 Zone Becomes the Next Market Test

Bitcoin's price action remains concentrated around a clearly defined area.

BTC traded around $65,000 on Aug. 7 and was at approximately $64,800 on Sunday. Since late June, Bitcoin has largely remained within a $60,000-to-$65,000 range.

During Friday's session, Bitcoin moved above $65,000 and reached approximately $65,340, finishing the week up around 3%. Other analysis in the supplied material identifies approximately $66,000 as another important resistance level.

The move coincided with a weaker-than-expected U.S. employment report. Payrolls fell by 23,000 in July compared with expectations for an increase of roughly 80,000, while June's figure was revised down to 20,000.

At the same time, ETF demand provided another source of support during the week. The approximately $850 million in weekly inflows dramatically exceeded July's total.

However, trading activity remained subdued. Bitcoin ETF turnover declined 9% to $8.19 billion, its second-lowest full-week level since October 2024.

The ETF picture also remains mixed over a longer horizon. Despite the strong August opening, Bitcoin ETFs have recorded approximately $4.44 billion of net outflows since January.

Another issue emerged from the proposed BIP-110 fork. The minority chain effectively stalled after producing only two blocks in roughly eight hours while Bitcoin's main chain produced 48. Support among recently mined blocks stood at only 2.53%, far below the proposal's 55% threshold.

The combination leaves Bitcoin balancing several competing signals: renewed ETF inflows, subdued trading activity, security concerns, regulatory uncertainty, and a price that remains near the upper boundary of its recent range.

What It Means for Investors

Bitcoin's latest market signal is less about a dramatic price move and more about its resilience amid conflicting developments.

The Coldcard exploit damaged confidence in a widely regarded form of self-custody, yet Bitcoin itself remained relatively stable. At the same time, capital returned to spot Bitcoin ETFs at the strongest weekly pace since April.

That combination highlights an important distinction between Bitcoin's underlying network and the infrastructure investors use to own or access it. The Coldcard exploit did not compromise the Bitcoin blockchain, while the BTCPay Server vulnerability affected specific Lightning infrastructure rather than standard on-chain wallets generated within BTCPay.

Institutional demand is another key factor to monitor. The approximately $853.5 million entering Bitcoin ETFs during the week was significant compared with July, but it remains small relative to the billions withdrawn during the preceding downturn.

Price action provides the other major signal. Bitcoin remains close to the $65,000-to-$66,000 area after spending weeks inside a relatively narrow range. Whether ETF inflows persist while BTC tests that zone will provide additional context on the durability of the recent improvement in investor demand.

Conclusion

Bitcoin ended the week near a pivotal price area while absorbing several potentially disruptive developments.

The Coldcard exploit resulted in more than $100 million of confirmed losses, additional security concerns emerged around BTCPay Server, the BIP-110 minority chain struggled to gain mining support, and progress on the CLARITY Act was delayed.

Yet Bitcoin remained near $65,000, while U.S. spot Bitcoin ETFs recorded their strongest inflow week since April.

For the cryptocurrency market, the contrast is notable. Security and regulatory uncertainty remain present, but institutional capital returned at a significantly faster pace in early August. The next market signal will depend on whether that demand persists as Bitcoin continues to confront resistance around $65,000 to $66,000.

FAQs

Why is Bitcoin trading near $65,000?

Bitcoin traded around $65,000 after finishing the week up roughly 3%. The move came as U.S. spot Bitcoin ETFs attracted about $853.5 million during the week and a weaker-than-expected U.S. jobs report coincided with Bitcoin moving above $65,000 on Friday.

How much money flowed into Bitcoin ETFs this week?

U.S. spot Bitcoin ETFs attracted approximately $853.5 million during the week ending Aug. 7, their strongest weekly inflow since April. BlackRock's IBIT accounted for $693.7 million, more than 80% of the total.

Was the Bitcoin network hacked in the Coldcard exploit?

No. The underlying Bitcoin blockchain was not hacked. The Coldcard incident involved weaknesses in the generation of recovery seed phrases for certain wallets, making affected private keys easier for attackers to exploit.

Why is the $65,000-to-$66,000 Bitcoin level important?

Bitcoin has traded largely between approximately $60,000 and $65,000 since late June, while the supplied analysis identifies the $65,000-to-$66,000 area as resistance. Bitcoin reached about $65,340 during Friday's move.

What happened to the BIP-110 Bitcoin fork?

The BIP-110 minority chain effectively stalled after producing only two blocks in roughly eight hours while Bitcoin's main chain produced 48. Only 2.53% of recently mined blocks supported the proposal, far below its 55% threshold.

This article was created with AI assistance and reviewed by an editor. For details, please refer to our Terms of Use.

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