A reported case of an unauthorized component being inserted into a Ledger hardware wallet has reignited debate over how to store bitcoin. The industry is split over whether self-custody, in which individuals manage assets directly, is safer than holding bitcoin through spot exchange-traded funds run by custodians. The incident highlighted physical security and supply-chain trust issues. Supporters of ETFs cite reduced security burdens, while critics warn that concentrating assets with a few custodians could create new single points of failure.

A warning that artificial intelligence could break cryptography protecting Bitcoin and Ethereum wallets faster than expected has fuelled debate over the two blockchains’ designs. Ethereum researcher Justin Drake urged the industry to prepare for “bunker mode” and said AI might find ways to crack wallet protections in months in a worst-case scenario. Blockstream CEO Adam Back criticised Ethereum’s early architecture and pointed to Bitcoin’s UTXO model. Vitalik Buterin said investors need not move assets now.