Bear market enters its tenth month
Bitcoin closed July with a modest gain, which is remarkable given the simultaneous turbulence in the stock markets. In terms of both price action and time, the Bitcoin market appears ripe for bottoming out of this bear market, which entered its tenth month on Saturday. August, however, begins with a concerning hack affecting Bitcoin users. Read more about this in today’s edition of Bitvavo’s Market News.
Market update
Bitcoin closed the month of July with a 6% gain at €54,500. On July 1, the coin recorded its lowest level of this bear market so far, at €50,650. A slight recovery followed for the remainder of the month.
That stability was remarkable, especially considering the turbulence in broader financial markets, caused by the war in Iran, concerns over US interest rate policy, and volatility in AI stocks. For most of the month, the Bitcoin price traded in a relatively narrow range between €54,000 and €57,000.
We are now in the tenth month of this bear market, measured from the peak on October 6, 2025. Both in terms of price and duration, Bitcoin has entered the range where previous bear markets have typically found a bottom. The price has fallen to its four-year moving average and is trading just above the average cost basis of all bitcoins in circulation.
This also coincides with the horizontal zone between €50,000 and €60,000, which includes the consolidation period of summer 2024 and the peaks of the 2021 bull market. If this level holds, the current bear market will prove shallow compared to 2018 and 2022. Those cycles saw drawdowns of 83% and 75%; whereas the current drawdown has so far been limited to 53%.
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Bitcoiners shaken by COLDCARD vulnerability
Researchers have uncovered a serious vulnerability affecting multiple generations of COLDCARD hardware wallets. As a result, some seed phrases, the recovery phrases that grant access to stored assets, can be deciphered much faster than intended. If you use a COLDCARD device, this is one of the rare occasions where taking immediate action is advisable. As a precaution, transfer your Bitcoin to a new wallet.
Since Thursday, more than 1,300 BTC has been stolen, according to the latest figures from Galaxy Research. The attackers managed to drain over 4,500 addresses, across four waves of hacks. The largest occurred overnight from Wednesday to Thursday, when more than 1,000 BTC disappeared from nearly 1,200 wallets in the space of just 41 minutes. Smaller wallets are now also being targeted, meaning the total losses are likely to continue mounting over the coming weeks.
The issue lies in how COLDCARD wallets generated their seed phases. Due to a firmware flaw, the process used far less randomness than intended. As a result, a seed phrase that appears perfectly valid to users could still have come from a relatively small collection of possible seeds. Attackers can search through that pool and use publicly available blockchain data to identify wallets worth targeting. They never need physical access to the hardware wallet itself.
Manufacturer Coinkite has now released updated firmware for all affected models. This will allow secure seeds to be generated once more in the future. However, the update does not make an existing seed phrase any more secure. Importing a seed into another device will not help either, as the weakness lies within the seed itself.
If you use a COLDCARD Mk2, Mk3, Mk4, Mk5, or Q, and your seed phrase was generated by the device before the updated firmware was installed, move your bitcoin to a new, secure wallet immediately. The same applies if you are no longer certain when or on which device the seed was created. When in doubt: migrate.
This hack underscores something that has long been known but has received relatively little attention. The irony is that many of the victims did exactly what they had been advised to do for years: accumulate bitcoin, withdraw it from an exchange, and store it on a reputable hardware wallet. The associated sense of independence and security has therefore taken a significant blow.
This does not mean that self-custody is no longer relevant, but it is important to approach it with realistic expectations. Self-custody removes counterparty risk, but the trade-off is the need for knowledge, ongoing maintenance, and trust in hardware and software. Additional layers of security can help, but they also bring new challenges and increase the risk of human error. In short, a universally secure setup does not exist. Anyone embarking on self-custody must be aware that they bear ongoing responsibility.
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In other news
Strategy uses newly issued shares to strengthen its financial buffer. Newly raised capital will primarily be used to cover existing dividend obligations. Last week, the company raised 500 million dollars; increasing its cash reserves to 3.7 billion dollars. This is enough to cover approximately two years of dividend payments. Strategy also repurchased its own Stretch shares for the first time. The price of STRC is now around $90. With an mNAV close to 1, another Bitcoin purchase appears unlikely for the time being.
New Bitcoin Security Consortium stimulates further Bitcoin development. Major firms such as BlackRock, Fidelity, Galaxy, and Block will fund developers focused on protecting Bitcoin against quantum computing threats. A total of 15 million dollars in capital has been pledged so far. Consortium members will largely decide individually which projects they choose to fund. Questions remain about what the 'further development' of Bitcoin means for these parties, although the consortium's broad mix of members reduces the risk of any single organization dominating its direction.
Crypto networks are busier, but generating less revenue from that activity. According to a new report from Bitwise, activity on networks like Ethereum and Solana has increased, while fee revenue gas actually decreased. This is partly by design: upgrades make block space cheaper and transactions faster. This is good news for users, but more challenging for investors who associate network activity with greater value for the underlying coin. Technical progress is making crypto more usable, but not automatically more profitable.
Ether ETFs attract more inflows than Bitcoin ETFs for the second consecutive week. In the week leading up to July 24, 103.8 million dollars flowed into spot ether funds, compared to 33.9 million dollars into Bitcoin funds. The difference was largely driven by BlackRock, with ETHA attracting 96 million dollars, while IBIT lost 95 million dollars. Incidentally, these cash flows had little impact on the price of bitcoin and ether. After months in which bitcoin dominated institutional interest, ETF investors have, for now, shifted their attention towards ether.
Satoshi Radio: In the latest episode of Satoshi Radio, the future of bitcoin takes center stage. Wall Street is launching a consortium to stimulate the development of bitcoin, with quantum security as its first priority. The bear market is visibly beginning to take its toll, with bankruptcies and layoffs across the sector. The Clarity Act and new, competing ETFs from Morgan Stanley also come up. The hosts kick off the episode with an existential question: why are we still in bitcoin?
This article is for informational purposes only and does not constitute a marketing communication or recommendation. None of the content herein should be considered as investment advice or a substitute for it. Bitvavo makes no guarantees regarding the accuracy or completeness of the provided information. Investments involve risks. There is a possibility of losing your entire invested capital.