Crypto commerce: A wake-up call for Bitcoin's $116 million self-custody

A $116 million hardware wallet vulnerability has reignited one of Bitcoin's oldest debates: Is holding your own key worth the risk? Days later, the U.S. spot Bitcoin ETF recorded its strongest inflows since April, prompting Bloomberg analyst Eric Balchunas to wonder whether the security scare could eventually push more investors from self-custody to ETFs. In addition, Strategy is preparing to resume Bitcoin purchases after a rare sell-off, Riot Platforms is reportedly converting its mining infrastructure into a $9 billion artificial intelligence transaction, and Trump Media is reconsidering its crypto financial strategy after suffering a $238 million quarterly loss.

Strategy CEO says company will resume Bitcoin accumulation this year

Strategy CEO Phong Le said the company plans to resume Bitcoin accumulation later this year in an effort to strengthen its long-term strategy after a series of relatively minor sell-offs raised questions about its once-firm "never sell" stance. Le told FOX Business that Strategy bought about 175,000 bitcoins this year and sold about 7000 bitcoins-about 25 times the amount it sold. The company currently holds more than 840,000 bitcoins, making it the largest institutional holder, but has sold bitcoins four times since May, most recently selling 1690 bitcoins to support preferred dividends, share repurchases and its U.S. dollar reserves.

The sell-offs highlight the competitive need Strategy faces as it balances its bitcoin accumulation strategy with its common and preferred shareholders 'obligations. Its financial model is also under pressure. According to Novaque Research, when companies trade prices below Bitcoin's net asset value, financing becomes increasingly diluted and the financing cycle becomes more difficult to maintain.

Phong Le appeared on the FOX Business show.

Bitcoin ETF demand rebounds, self-custody risks are under concern

U.S. spot Bitcoin ETF attracted a net inflow of approximately US$1 billion this week, signaling renewed institutional demand, even though bitcoin prices remain sluggish and a major hardware wallet vulnerability has focused new attention on self-custody risks.

Bloomberg ETF analyst Eric Balchunas said it was the third-best week since October, describing the period as a "silent IPO" of Bitcoin, a term promoted by investor Jordi Visser. The theory holds that early investors have been selling into growing demand for ETFs and institutions, creating enough supply to keep Bitcoin depressed despite new capital entering the market.

The rally also came after a Coldcard hardware wallet vulnerability related to key generation errors that stole approximately $116 million in Bitcoin. Balchunas said the incident could ultimately increase the appeal of ETFs to investors worried about the risks of self-custody, noting that inflows of funds following the hack could be a link, although it has not yet been confirmed. He warned that correlation does not mean cause and effect, but added,"In the long term, I don't believe that no one will migrate."

Anthropic has reportedly reached a $9 billion computing deal with Bitcoin miner Riot

Anthropic has reportedly reached a $9 billion deal with Riot Platforms to obtain 191 megawatts of capacity from the Bitcoin miner's campus in Texas, highlighting that power access is becoming increasingly valuable as AI data centers face capacity constraints.

Riot said it has secured a 20-year agreement to supply 191 megawatts of electricity from its Rockdale campus to a "leading cutting-edge artificial intelligence" company that Bloomberg identified as Anthropic. The deal came after Anthropic leased the TeraWulf data center for $19 billion and added Riot to a growing list of Bitcoin miners expanding into AI, including Bitdeer, CleanSpark, MARA Holdings, Core Scientific, Hut8 and IREN.

Riot shares fell 5.4% on Monday, then rose 21% overnight, and are up about 50% year-to-date. The fourth-largest Bitcoin miner has a market capitalisation of $7.33 billion, and Bernstein said collaboration between AI companies and miners could help solve the power shortage that constrains data center expansion.

Trump Media reforms its crypto financial strategy after a $238 million quarterly loss

Trump Media said it will reform its digital asset financial strategy after unrealized losses on cryptocurrencies and securities resulted in the company's second-quarter net loss of $238 million, highlighting the balance sheet risks of companies holding cryptocurrencies.

The company reported an unrealized loss of $190.4 million on its digital assets and pledged digital assets and equity securities in the second quarter. As of June 30, it held 9,477.16 bitcoins, down from 9,542.16 in the previous quarter. In July, it sold $159.6 million in bitcoin-related securities and used the proceeds to buy more bitcoins, bringing its holdings to approximately 14,139 bitcoins, worth $890.5 million, on July 31.

Trump Media warned that generating additional revenue from its Bitcoin holdings could expose it to counterparty risk, especially if a partner defaults or becomes insolvent. In some cases, companies may not be able to recover bitcoins committed under unsecured arrangements. It also plans to devote more resources to Truth Social, Truth+ and other media businesses as part of a broader shift in capital allocation.