# Ledger hack concerns deepen custody doubts as investors weigh ETFs, exchanges

By Token Post

Canonical URL: https://www.tokenpost.com/news/investing/30514
Published: 2026-10-12T18:40:31.000Z
Updated: 2026-10-12T18:40:31.000Z
Section: Investing

> Yahoo Finance's Scott Melker said suspected Ledger wallet tampering and estimated losses above $86 million are deepening doubts over self-custody, potentially pushing investors toward ETFs and exchanges.

Confidence in crypto self-custody is coming under pressure after suspected hardware wallet tampering and large estimated thefts, raising the prospect that some investors may shift toward ETFs or exchange custody.

On Yahoo Finance's Daily Wolf on October 12, crypto analyst Scott Melker said the Ledger-related incident showed that it is now "very hard" to trust self-custody.

Melker said Ledger is investigating devices sold through a third-party reseller in Southeast Asia. Bitquery estimated linked losses at $93.2 million, while multiple estimates were above $86 million. He said the concern is that physical devices may have been tampered with before reaching users.

Recent incidents involving Coldcard and data breaches at companies including Trezor were also cited as factors weighing on confidence in self-custody. Melker said users can buy directly from manufacturers, but it is difficult to assess the risk of tampering in third-party sales channels. He described custody as facing an existential crisis.

The issue may also be intersecting with demand for spot bitcoin ETFs. Melker said Hunter Horsley of Bitwise recently noted a major increase in bitcoin ETF flows after the Coldcard hack. He also pointed to rising use of a route that allows investors to sell bitcoin and move into an ETF without a taxable transaction.

Melker cautioned, however, that ETF flows are not necessarily predictive of bitcoin's price. He said flows tend to rise after strong price gains and outflows often follow declines, making them more reactive than leading indicators. He noted that recent outflows had stopped, but said that did not mean demand had fully recovered.

Strategy's bitcoin purchases were also discussed. Melker said the company bought 250 bitcoin last week for $21.5 million at an average price of $86,194. Separately, it repurchased 1.93 million STRC preferred shares for $192.4 million, a move he said appeared more important to the company than adding bitcoin in larger size.

A Nasdaq debut by an XRP treasury company was presented as another example of institutional-style crypto exposure. Melker said the structure, aimed at increasing XRP per share, resembles Strategy's bitcoin approach, with the key question being whether it can outperform the token itself in a more skeptical market.

Bitcoin miners' shift toward AI data centers was described as another continuing trend. Melker said some miners are using existing facilities and power infrastructure to move into AI workloads, with already-compliant mining sites able to upgrade and target potentially higher-return uses.

On tokenization, Melker said Wall Street is broadly adopting blockchain-based market infrastructure, but it remains unclear whether the value will accrue to retail investors. He cited potential benefits such as longer market access, faster transfers and more efficient collateral use, while noting obstacles including issuer objections, regulatory uncertainty and limited liquidity.