Coldcard Bug Exposes Single-Sig Risk as Multisig Gains Traction
Bitcoin (BTC)
Editor:
Eugene Serbin
Bitcoin Magazine reports that a catastrophic entropy bug in Coldcard hardware wallets, undiscovered since at least 2021, has triggered a shift toward multi-vendor multisignature custody. The flaw affected single-seed wallets and contributed to the loss of over $100 million in Bitcoin, mostly from users who did not add extra passphrases or dice rolls to their key generation. Nick Neuman, CEO of Casa, stated that 233,000 Bitcoin moved to safety in reaction to the Coldcard hack.
This event has led many advocates to declare the 'death of single sig' as the standard self-custody method. The bug demonstrated that even reputable manufacturers can suffer from major issues, prompting a revaluation of trust in single devices. Multi-vendor multisig setups now require signatures from multiple keys generated by different hardware providers, such as Trezor and Ledger.
This structure minimizes dependency on any single manufacturer and protects against specific hardware failures. Bitcoin scripts enforce these conditions, requiring a threshold of valid signatures for spending. The viral interest in multisig is driven by the need to avoid the entropy failures seen in Coldcard and other wallets like Trust Wallet.
How the market reacted
Whalio's own Binance spot order flow for BTC, measured when this story was written up on 27 August 2026. Not the outlet's figures.
Bitcoin is trading at $79,023.75 with a 1-hour buy ratio of 44.7% and a 4-hour buy ratio of 43.0%, both below the 24-hour average of 49.9%. This indicates that short-term buying pressure is fading relative to the daily trend. The 1-hour volume delta is -$9,605,302, while the 4-hour delta is -$13,495,762, showing net selling activity in the immediate term. The 24-hour volume delta is -$903,088, and the cumulative volume delta (CVD) for the day closed at -$64,526,673. These figures suggest that sellers have dominated the flow over the last 24 hours, despite the daily buy ratio hovering near parity.
The latest daily buy ratio of 46.7% sits at the 18th percentile of the last 322 days, against a median of 49.2% - weaker buying than most days.
Twenty-four hours later
What BTC did over the 24 hours after the story broke. The market moves for its own reasons; this is what happened, not what the story caused.
Was that an ordinary day?
The same Binance spot measurements for BTC, averaged over the days leading up to the story.
Over the preceding week, the average buy ratio was 51.6%, making today's 24-hour ratio of 49.9% slightly below the weekly norm by 1.7 points. Spot volume for the day was $1,148,236,056, which is 0.54 times the weekly average, indicating significantly lower trading activity than usual. While the coin saw a 14.0% price increase over eight days, the current volume is roughly half of what is typical for this period. This suggests a consolidation phase with reduced participation compared to the broader weekly trend.