What the Cold Card Hack Really Means for Bitcoin | Tillman Holloway & Andrew Parish

**Andrew Parish** (0:00)
A positive to this is that Bitcoin didn't move more than about 1% on this whole thing. That's really what we should be talking about. The custody stuff, that'll work itself out, but the fact that Bitcoin is taking these punches.
Sailor keeps announcing stuff every week, and it's just another version of selling Bitcoin, right? Bitcoin doesn't move. Same thing with $100 million cold storage hack, Bitcoin's like, nah, I don't care.

**Anthony Pompliano** (0:23)
What's going on, guys? Today we got a great conversation with Tillman Holloway and Andrew Parish of Arch Public. We go through the cold card of what this means for the hardcore Bitcoiners who now are questioning whether self custody is actually something that the average Bitcoiner can do. We also get into what's going on with all of the Chinese open source models, what's going on with American closed source models. We talk about volatility, we talk about Leopold and situation awareness and the big hedge fund that blew up. And then they're giving away Rolex watch. Yes, these guys come every single time. They've got gifts. And so make sure you pay attention to that part. It's pretty cool gift that they brought this time. And so here's my latest conversation with Tillman and Andrew of Arch Public.
All right, guys, I think we got to start with cold card. Obviously, that's the big story in Bitcoin right now. Tillman, what's your take on this? Is this something people should be worried about or is this kind of a one off event and something that people won't be talking about, let's say in two or three months?

**Tillman Holloway** (1:13)
I think the old guard, the changing of the old guard has already taken place. Wall Street drives this market now, whether we want to admit it or not. I think what you saw is a public example of that old guard dying, if you will, and the smartest people in the room, the people who were Bitcoin maxis that touted no use case beyond Bitcoin on the blockchain, and all these other things that didn't make sense to the rest of us. I think a lot of that arrogance is coming home to roost. Unfortunate for the victims, I mean, it's a catastrophe for a lot of folks. But I don't see it as being widespread across the community. I actually see it pretty concentrated within the maxi community.
If you look at the price of Bitcoin, it obviously doesn't care. And so $100 million is still a lot of money, but in the grand scheme of things, it's not. And I think it shines a light to the need for addressing risk beyond just what we think risk looks like. But I think self-custody, from a hardware perspective, you're trusting a hardware provider at the end of the day. You're trusting the firmware updates that they're giving you. You're trusting its ability to interact with the chain.
I don't think people recognize that risk or recognize that they were trusting somebody else in that equation. It is unfortunate, because there were a lot of victims that did everything right, that didn't do anything outside of really what was prudent and what was taught to them as being the safest way to self-custody. So it's a tragedy, but it really is unimportant as it pertains to where Bitcoin is going and really who has the reins right now.

**Andrew Parish** (3:05)
The Bitcoin community mocked a lot of quote-unquote boomers that moved Bitcoin from cold storage to ETFs.
And that doesn't look so great right now. They were forward thinking. They trusted the reality associated with institutional grade custody. We just had a conversation Tillman and I did with Matt Haugen at Bitwise. And when we asked him to kind of break down, because we haven't talked about what spot Bitcoin ETF or institutional custody looks like these days. We talked about it a year and a half ago, two years ago when spot Bitcoin ETFs were approved, but nobody's talked about it since then. It's like 19 to 20 layers deep of security, risk measures, custody at just huge levels.
That is materially different than how many dice rolls can you do to make sure that you're good to go on your cold storage wallet? Like some of the conversations in crypto Twitter over the past two days have literally sounded insane. Like not only would I not do that, but 99.9% of people think that sounds insane. And so does it make sense to hold some Fidelity ETF on Fidelity?
A lot of people that have a lot of capital think, that's pretty good idea. I think I'm covered there. So I think you asked, will the cold card thing last for a longer time? Like we all know here that crypto Twitter has the attention span of a NAT. But at the same time, three months, six months, nine months out, you'll see just an uptick in inflows across Bitcoin ETFs because people are still moving money from spots that they've now become a little bit uncomfortable with. And there's no reason to take a risk associated with cold storage when you don't have to. And so I think that's going to be the lasting impact there in my mind.