GM to all of you nutcases. It’s Crypto Nutshell #940 bringin‘ the news… 🥜

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BREAKING: Bitcoin cold-wallet attack spreads to 4,500 addresses as losses near $89 million

Jonathan Goodman kept his Coldcard keys in a safety deposit box, on a device that had never touched the internet.

He's out 18.25 coins, more than a million dollars' worth, taken from his wallets in about seven minutes.

Nobody went near the box…

Coldcard is the hardware wallet serious Bitcoiners buy, and a firmware build from March 2021 broke the part that generates your keys.

It was meant to pull your seed phrase from a dedicated randomness chip, but a build setting skipped it and used the chip's serial number and clock instead.

Both are easy to work out, so the pool of possible keys shrank far enough that an attacker could generate candidates on his own machine and match them against the public blockchain.

Your own Coldcard could be powered off in a vault on another continent and it wouldn't even matter.

Galaxy Research counts three waves since Thursday, 1,367 bitcoin from 4,585 addresses, roughly $88 million at today's price.

That's Sunday's count, the sweeps are still running, and it's been revised up every day.

The average address gave up less than a third of a bitcoin.

The coins had sat untouched for three years on average.

These are people who did everything they were told to: bought the respected device, generated the seed offline, kept it off exchanges, then left it alone.

Guy Swann called it "the worst hit in bitcoin history" to the holders who'd been most careful.

There's no support line to ring, no chargeback, and nothing they could have done differently.

Coinkite reckons an attacker used AI to find the bug, and says its own AI review weeks earlier missed it.

So it's hard to blame anyone for Friday.

Holders moved 39,600 coins in transfers under 1 BTC, the heaviest such day since FTX collapsed in November 2022.

Back then they were running off exchanges.

This time exchange balances rose by about 11,000 coins in a day.

"Not your keys, not your coins" got a live test, and a good chunk of the market decided it would rather have someone to phone.

If you generated a seed on a Coldcard, a firmware update won't fix it, so move everything to a new seed today, and check on whoever you talked into one.

The 8-hour workday is becoming a 4-hour workday for people who know how to use AI.

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In his latest long-form piece, Where Crypto Fits in the Exponential Age, Raoul Pal opened with a confession before making his case.

Pal is a former Goldman Sachs macro trader and founder of Real Vision. He bought Bitcoin at $200 in 2013 and published the first macro valuation of it anyone had written.

Then he traded around it. Sold near the 2017 top on fork drama. Watched it run another 10x without him. Bought back higher during COVID.

His lesson, paid for in eight figures of foregone gains:

Now the thesis. He splits crypto into 2 jobs.

Their addressable market? Global real estate at $400 trillion. Debt at $325 trillion. Equities at $125 trillion.

Not a bigger prize. An order of magnitude bigger.

So why does it feel so bad right now? Bitcoin tracks liquidity at 87% correlation and is simply running cold. Nothing broke. The ISM has been expanding six straight months, and that's the environment where crypto comes alive.

Own the vault. Own the rails. And stop touching it. 🪤

Let’s kick off the week with a look at the Bitcoin HODL Waves - one of the clearest snapshots of market conviction.

Each coloured band represents the percentage of Bitcoin that last moved within a specific time frame.

The cooler the colour, the older the coins - with purple showing Bitcoin that hasn’t moved in 10+ years.

Today we’ll be focusing on long-term holders (LTHs) - defined as coins held for more than six months.

Here’s how the Bitcoin supply breakdown looks today compared to two weeks ago:

TL;DR: 81.28% of all Bitcoin has not moved in over six months. 🔒

Down from 81.50% two weeks ago, a 0.22% slip and the first give-back after a long tightening run.

The 3-5 year band did the damage, down 0.55%, the biggest single move on the board.

Some of it aged forward into the next bracket, with 5-7 year supply up 0.37%.

The rest actually moved, a slice of multi-year-old coins waking up for the first time in years, and that's what tipped the total lower.

The young end kept feeding the base underneath.

The 1-2 year band climbed 0.17% as drawdown buyers graduate up the ladder, and the oldest supply barely moved, the 10-year-plus base ticking up a rounding 0.04% to 17.74%.

Net it out: more than four in five Bitcoin still sit dormant for six months or longer.

After a stretch of nothing but tightening, the float loosened a touch this time, and it came from old hands moving rather than new sellers at the front. 💎

What’s the Deal With Meta’s ‘Pervert Glasses’? Lawsuits, privacy complaints, secret recordings, and government investigations are putting Meta’s AI glasses under scrutiny.

Why a DeFi platform ditched its consumer app to become the secret backend for tech giants. Spark is positioning itself between fragmented stablecoin networks, with $260M in OTC loans and a $1B year-end target.

BNB Chain pursues legal action after ex-employee’s memecoin launch. A former employee allegedly retained a tutorial wallet’s seed phrase and used it to launch an unauthorized token.

SEC keeps Nasdaq bitcoin options on hold after granting CME review. CME argues the contracts fall under the CFTC’s exclusive oversight.

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