Bitcoin sentiment reaches historic low after Coldcard hack

Sentiment surrounding Bitcoin has fallen to the most negative level ever measured by data firm Santiment following the Coldcard security vulnerability. Fear dominates on social media: for every positive reaction about Bitcoin, there are now more than 1.7 negative reactions. That is a more extreme picture than in previous major crisis situations in the crypto market.

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In brief:

• The positive/negative sentiment on social media around Bitcoin is at the lowest point ever measured by Santiment, with only 0.58 positive reactions per negative reaction.
• The cause is the Coldcard firmware security flaw, which raises doubts about the security of cold wallets.
• Bitcoin currently stands at $63.000, a decline of 1.2% over the past 24 hours.

Fear prevails after attack on self-custody

Santiment, which tracks messages on platforms such as X, Reddit and Telegram, observes that the ratio of positive to negative reactions about Bitcoin has dropped to 0.58 to 1.00. This means negative messages clearly have the upper hand. This is the worst figure in the company’s entire measurement history.

What makes this incident so different from earlier crises is that it affects something many users regarded as untouchable: the self-custody of crypto via a hardware wallet. Earlier disasters such as the collapse of FTX or the Mt. Gox hack mainly affected exchanges and third parties. Now the doubt has shifted to cold wallets, a place where many investors thought they were completely safe.

Greater than war fears and Black Thursday

Santiment compares the current fear measurement with earlier low points. Earlier this year, the escalation of the conflict between the US, Iran and Israel led to the second most negative sentiment ever measured. The Coldcard incident now tops that. Even the coronavirus crash of March 2020, known as Black Thursday, and other major crashes do not come close to the current negative mood.

The Bitcoin price currently stands at $63.000, a decline of 1.2% over the past 24 hours. Historically, extreme fear readings on social media regularly precede a recovery, because a large proportion of sellers have already left the market by then. Santiment says it will continue to closely monitor the situation and keep tracking the impact on the network and sentiment.