Bitcoin Slips Under $63,000 as Coldcard Losses Rattle Market Despite Iran Deal Hopes

Bitcoin extended its weekend losses, slipping below the $63,000 mark, even as renewed optimism surrounding U.S.-Iran negotiations eased global inflation concerns and led to a decline in oil prices and Treasury yields. The cryptocurrency market was rattled by nearly $89 million in losses stemming from a vulnerability in Coldcard hardware wallets, compounded by disappointing second-quarter earnings from major companies in the sector.

The security flaw in Coldcard hardware wallets, manufactured by Canadian crypto wallet firm Coinkite Inc., resulted in the theft of user funds. According to Galaxy Research data, approximately 1,367 Bitcoin were stolen from 4,585 addresses across three waves of attacks that began on July 30, with total observed losses reaching $88.6 million. This vulnerability originated from a firmware release in March 2021, which introduced an error causing the wallet recovery seeds to be generated using a predictable software randomizer. The fact that hardware wallets, typically considered offline and highly secure, were susceptible to such an attack has generated significant concern within the crypto markets.

On the macroeconomic front, geopolitical tensions eased following U.S. President Donald Trump's announcement that further negotiations with Iran would commence on Monday. The cancellation of a planned major U.S. attack on Iran boosted hopes for a deal to reopen the Strait of Hormuz. These developments led to a notable drop in crude oil prices, with Brent crude for October delivery falling as much as 7.3% to $81.55 per barrel. Additionally, the decline in oil prices, which alleviated inflation concerns, caused the benchmark 10-year U.S. Treasury yield to drop four basis points to 4.69%.

Despite these positive macroeconomic tailwinds, Bitcoin (BTC) declined by 1% to around $62,829, and Ethereum (ETH) also fell by over 1%, failing to surpass the $1,900 level. Beyond the Coldcard incident, weak second-quarter earnings from major crypto companies such as MicroStrategy (MSTR) and Coinbase Global Inc. (COIN) further dampened market sentiment. MicroStrategy reported a larger-than-expected loss, primarily due to significant unrealized losses on its Bitcoin holdings, intensifying concerns over the company's substantial Bitcoin pile.

Crypto markets have been grappling with a prolonged exodus of investor interest throughout 2026. Sustained losses in Bitcoin and the increasing popularity of artificial intelligence-linked assets have largely overshadowed the industry's outlook. Persistent risk-aversion, partly due to the U.S.-Iran tensions, has also weighed on the sector. While a reduction in geopolitical tensions would typically bolster market confidence, the cryptocurrency market's decline despite this news suggests that its internal dynamics and security concerns are currently taking precedence.

Analysts indicate that market sentiment remains mixed. Security vulnerabilities in hardware wallets like Coldcard could erode investor confidence in digital asset storage methods, potentially leading to a broader reassessment. Looking ahead, while the global inflation outlook and central bank interest rate policies will continue to influence crypto markets, cybersecurity concerns and the recovery of institutional balance sheets are expected to be critical factors for Bitcoin and other altcoins.