Strive Vice President Joe Burnett said in a post on X that the recent period could rank among the worst weeks in Bitcoin history.
He said many people bought reputable hardware wallets, generated seed phrases offline, and followed established best practices, yet still lost significant amounts of Bitcoin because of a flaw affecting seed phrases generated by COLDCARDwallet from March 2021 onward. According to Burnett, the vulnerability went undetected for more than five years.
Confidence in self-custody may be permanently changed
Burnett said the episode will permanently change how people view self-custody. Self-custody will remain, he wrote, but it has already been changed for good.
For those who want direct control over large Bitcoin holdings, he said the standard should be multi-vendor multisig. Keys should be generated independently using different hardware and different software, then stored in separate physical locations. If that approach is not acceptable, he said users should turn to institutional-grade custodians.
Adoption is moving through ETFs and institutional channels
Burnett said the current wave of Bitcoin adoption is taking place through ETFs, treasury companies, and institutional custodians. He said that growth is largely coming from people who do not want to become experts in private key generation, hardware security, firmware, backups, inheritance planning, and physical storage.
In his view, using a single key generated by one hardware wallet to secure a large amount of Bitcoin creates too much concentration risk.
Institutional custody carries its own risks
Burnett also said institutional custody could eventually leave too much Bitcoin concentrated in large companies, creating risks tied to censorship, seizure, and confiscation.
At the same time, he said Bitcoin’s portability and settlement properties offer an important counterweight. Users can create a wallet and ask a custodian to send the Bitcoin, shifting from counterparty risk to direct ownership within minutes.
A custody failure does not invalidate Bitcoin itself
Burnett said that as long as Bitcoin itself remains secure, the failure of one custody model does not discredit the underlying monetary system. Instead, he said, it pushes the market to build better tools, stronger standards, and more resilient custody architecture.
He added that this week may ultimately mark the end of one era in Bitcoin custody and the start of the next wave of Bitcoin adoption.