Bitcoin has been navigating a turbulent week, trading at $64,986, slightly up by 0.61% as of Saturday. As it hovers just beneath the $65,000 threshold, two notable security incidents have captured the attention of both investors and developers.
Late Friday, a significant flaw in the BTCPay Server was exploited, allowing attackers to steal credentials that control Lightning nodes operating with LND software. This vulnerability enabled unauthorized access to ‘macaroon’ files that are crucial for controlling Lightning wallets, shutting down payment channels, and moving funds.
BTCPay has confirmed that funds were indeed stolen and has urged all operators to update to version 2.4.2 immediately or to take their servers offline. The total amount of Bitcoin lost and the number of affected users remain undisclosed.
Among the confirmed victims is hardware wallet manufacturer Foundation, which reported that its BTCPay Lightning node was compromised, although its on-chain hot wallet remained secure. Other reports indicate that Bitcoin publication Citadel21 also suffered losses from a Lightning node. Thankfully, standard on-chain wallets within BTCPay were not at risk, but funds held in LND node on-chain wallets may still be vulnerable.
Concerns Over BIP-110 Fork
Compounding the situation, discussions surrounding a proposed BIP-110 fork have raised alarms. This fork could activate around block 961,632, potentially limiting the non-payment data stored in Bitcoin transactions. As of Friday, miner signaling was recorded at approximately 2.6%, significantly below the 55% threshold needed for activation.
If this chain split occurs, holders would retain equal balances on both chains. However, developer Kevin Loaec has warned that selling forked coins without first separating balances could expose genuine BTC to replay attacks.
A Surge in ETF Inflows
On a more positive note, U.S. spot Bitcoin ETFs experienced a remarkable influx, pulling in around $1 billion in net inflows this week—the best performance since April. Bloomberg ETF analyst Eric Balchunas noted this surge is the third-best week since October 2025. He also speculated that recent security breaches, including a notable hack involving the Coldcard hardware wallet with around $116 million in Bitcoin stolen, may have prompted some investors to seek refuge in ETFs.
On-chain analytics firm Santiment reported a significant spike in Bitcoin’s network activity, with 2.27 million new wallets created last week, marking the highest level in a year. This surge has been partially attributed to the Coldcard incident, as security uncertainties often push users to rethink their custody setups and create fresh wallets. Additionally, larger Bitcoin stakeholders have historically taken advantage of rising retail activity to accumulate more aggressively.
As of the latest trading session, Bitcoin was recorded slightly down at $64,933, a decrease of $74 on the day. The upcoming days will be crucial as the market reacts to these developments, and all eyes will be on how the community addresses the ongoing security challenges.
