Who ever thought their best solution is to move from Coldcard to a Centralized Exchange has a pretty large chance of waking up to a really empty balance.

Anyway.

I do not believe this will destroy the idea of hardware wallets, or the idea of self custody.  It is a very big opportunity for a newer brand to advertise it self, or for a larger brand such as Trezor to advertise a new product.  And I believe this will actually make some of the brands stick out better and more than ever before with their new products.  It could be as simple as including dice in the package and instructing the customer to create their own Seed completely offline and manually.  Instruct them to create a Passphrase or find a way to make easy Multi Sig setups and you already have a reason to advertise that product as the 'strongest'.

Self custody will not die.  It will progress and people will actually make their Cryptocurrency wallets a lot safer.  The rest of them who move to Centralized Exchanges or ETFs, they either lost a lot of money to the Coldcard attacker and they are too afraid to have money in their own responsibility any more or they were never really too excited about self custody in the first place.

This is going to provoke a competition for who can find the best way to profit off of this.