Events made you scare about custodial wallets, centralized exchanges.

[Die_empty]

[04 August 2026] The Big Migration: On-Chain Repercussions of the Coldcard Hack.

Part of the flight went to exchanges. Exchange deposits from small holders with balances below 1 BTC spiked to their highest level since February 6, as some users opted for custodial platforms over new self-custody wallets to quickly secure their funds.

This part of the article caught my attention. Some of the small Bitcoin hodlers had to move their asset to centralized exchanges. This means that because of the Coldcard hacks, this set of people now believes that centralized is safer. Exchanges can also suffer hacks and depositors will lose funds. Maybe they have confidence that they will get a repayment. MtGox (after so many years), FTX, and Binance depositors got their money back when they had issues.

No matter what happens, open-source non-centralised wallets are the best.

[Dreadboost]

[04 August 2026] The Big Migration: On-Chain Repercussions of the Coldcard Hack.

Part of the flight went to exchanges. Exchange deposits from small holders with balances below 1 BTC spiked to their highest level since February 6, as some users opted for custodial platforms over new self-custody wallets to quickly secure their funds.

This part of the article caught my attention. Some of the small Bitcoin hodlers had to move their asset to centralized exchanges. This means that because of the Coldcard hacks, this set of people now believes that centralized is safer. Exchanges can also suffer hacks and depositors will lose funds. Maybe they have confidence that they will get a repayment. MtGox (after so many years), FTX, and Binance depositors got their money back when they had issues.

No matter what happens, open-source non-centralised wallets are the best.

What I believe they think is that if a non-centralized hard wallet claimed to be more secure than a centralized wallet got hacked due to vulnerabilities in their system, then there is no point in using them. They believe using a centralized exchange has no risk the way it was being preached against.

Exchanges have also suffered hacks in the past, and most of them have been able to pay back the money that was taken from their custody. Exchanges have tried to build trust with people despite the vulnerability to being hacked easily.

[Renampun]

What I believe they think is that if a non-centralized hard wallet claimed to be more secure than a centralized wallet got hacked due to vulnerabilities in their system, then there is no point in using them. They believe using a centralized exchange has no risk the way it was being preached against.

Exchanges have also suffered hacks in the past, and most of them have been able to pay back the money that was taken from their custody. Exchanges have tried to build trust with people despite the vulnerability to being hacked easily.

Exchanges or ETF providers do indeed benefit from this, as they appear to be a safe haven for holders to store their assets since they have the liquidity and regulatory framework to compensate users if their platforms are hacked. However, this is misleading, as self-custody remains the best and safest option for holding.. while it won't provide any compensation if you lose your assets, you can at least add a passphrase and multi-signature to prevent your assets from being compromised.

[Darker45]

~snip~

Exchanges or ETF providers do indeed benefit from this, as they appear to be a safe haven for holders to store their assets since they have the liquidity and regulatory framework to compensate users if their platforms are hacked. However, this is misleading, as self-custody remains the best and safest option for holding.. while it won't provide any compensation if you lose your assets, you can at least add a passphrase and multi-signature to prevent your assets from being compromised.

Let me play the devil's advocate here. You're not putting forward any argument.

If it's misleading for exchanges to claim to be a safe haven for hodlers despite their liquidity, regulatory compliance, and ability to compensate customers if the platform's hacked, why?

And isn't it also misleading to generalize that self-custody is the "best and safest option" for hodling when somebody who's keeping his funds on a hardware wallet has lost them while another hodling his on YoBit still has it?

[arwin100]

Exchanges or ETF providers do indeed benefit from this, as they appear to be a safe haven for holders to store their assets since they have the liquidity and regulatory framework to compensate users if their platforms are hacked. However, this is misleading, as self-custody remains the best and safest option for holding.. while it won't provide any compensation if you lose your assets, you can at least add a passphrase and multi-signature to prevent your assets from being compromised.

Let me play the devil's advocate here. You're not putting forward any argument.

If it's misleading for exchanges to claim to be a safe haven for hodlers despite their liquidity, regulatory compliance, and ability to compensate customers if the platform's hacked, why?

And isn't it also misleading to generalize that self-custody is the "best and safest option" for hodling when somebody who's keeping his funds on a hardware wallet has lost them while another hodling his on YoBit still has it?

I think there's some confusion towards your answer in his statement, because maybe you are confused with the bolded text he mentioned.

But try to proceed reading because he also said that self custody is the best, which I also agree because. We cannot rely those exchange the safety of out funds, since they are most riskier place or platform to store our wallet.

So yeah hardware wallet is the best if we compare on the exchange you use as example or maybe any other one even if we say they are big or successful now.

[Darker45]

~snip~

~snip~

But try to proceed reading because he also said that self custody is the best, which I also agree because. We cannot rely those exchange the safety of out funds, since they are most riskier place or platform to store our wallet.

So yeah hardware wallet is the best if we compare on the exchange you use as example or maybe any other one even if we say they are big or successful now.

Maybe the best for one, not for another? People even forget their 4-digit ATM PIN. They even often forget where they put their car keys, eyeglasses, pens, and whatnot. Is it best for them to be their own bank? I don't think so.

Quite frankly, isn't it better for them to instead own ETFs in registered, regulated, and highly compliant brokers?

Isn't it true that for many it's far riskier for them to act as their own bank because they couldn't even put into practice the motto "don't trust, verify"? Oh yeah, a wallet must be open-source. Would you be able to read the codes, then, and guarantee for yourself that they're free of bugs? Or you're still fully reliant and just blindly trust on what others have to say?

[knowngunman]

Exchanges or ETF providers do indeed benefit from this, as they appear to be a safe haven for holders to store their assets since they have the liquidity and regulatory framework to compensate users if their platforms are hacked. However, this is misleading, as self-custody remains the best and safest option for holding.. while it won't provide any compensation if you lose your assets, you can at least add a passphrase and multi-signature to prevent your assets from being compromised.

I liked how you put it "they appear to be safe" but in actual sense, they're not. Nothing come close to self custody but only if you can manage it well.

Self custody is a concept and this ColdCard incident should not discredit the whole concept. It doesn't mean the concept is unsafe as we can see the problem was a bad setup. This should open our eyes to become better at practicing self custody.

Not all exchange compensate their customers after hack. They compensate some and ignore some. The Mt. Gox case is still fresh as if it happened yesterday. Not all users get back their funds.