Bitcoin went up over 20% last week on a

historic short squeeze, but now we're

seeing evidence of real follow through

and real buying. We're going to talk

about that and everything else happening

in the crypto news today on the Daily

Wolf. Let's go.

What is up everybody? Welcome to the

Daily Wolf on Yahoo Finance. I'm your

host Scott Melker, also known as the

Wolf of All Streets. Hard to do a show

right now without talking about the

historic short squeeze that we saw last

week. As you know, we had billions and

billions and billions and billions in

dollars in shorts liquidated. But the

big question coming into the week was,

would we see some follow-through? Would

we see spot buying? Would we see ETF

buying? Or would this be yet another

technical move that would eventually

fade away? The good news is regardless

of price, we have some of that evidence.

Here you go. Yes, Bitcoin steadies above

79,000. price irrelevant as ETF inflows

hit longest streak since April. Bitcoin

held its ground Thursday as spot Bitcoin

ETFs logged an eighth straight day of

net inflows while altcoins drifted lower

across the board. So to put some numbers

behind this, approximately 2.8 billion

has entered Bitcoin spot ETFs, more

obviously if you include the altcoins

just during this 8day streak. August

inflows now exceed three billion, making

this the strongest month of 2026. Now,

you may remember if you ever look at a

Bitcoin chart for Bitcoin performance,

generally August is the worst month. But

now, we're seeing one of our best August

ever, surprisingly, here in the middle

of the summer doldrums with massive ETF

inflows, confirming spot buying and

interest following that short squeeze.

Now, of course, the leader here is Black

Rockck's IBIT, which attracted 1.33

billion last week and recorded its

greatest trading volume ever during a

positive week. Now, importantly, there

were down weeks. There haven't been many

of them, but for IBIT where it recorded

more volume. Now, I think what's more

interesting here, uh, also coming from

Black Rockck, Black Rockck's Mitchnik

says macro case for Bitcoin is

strengthening after record trading and

positive week. So, if you don't know,

Robbie Mitchnik is the Black Rockck head

of digital assets. And in this article,

he shared his outlook for Bitcoin after

the company's spot Bitcoin ETF. IBIT hit

record volume for positive week. So he's

saying that the macro case being that

Bitcoin is effectively an emerging store

of value alongside gold that that case

is strengthening.

So interesting. Something I keep saying

on my shows, but every time price goes

up, all of the narratives that

everybody's been screaming about when

nobody cared seem to come back in vogue,

right? Bitcoin is no more a store of

value at $79,000 than it was when we

were screaming about it at $65,000.

Reminding us once again that the only

thing that really matters for people to

get in Bitcoin, sadly, is the price

going up. The minute the price goes up,

all of those bullish things that we

talked about in a bare market seem to

matter once again. But it is really a

positive signal that gold moved and

Bitcoin now traded like gold with a

higher beta and actually made a larger

move with people talking about it being

a hedge against all of the insanity

that's happening on the fiscal side at

Treasury with Scott Bet. Now a little

inside baseball. If you haven't listened

to any of my shows or interviews before,

I had Anthony Scaramucci on years ago

and he told a story about how I believe

was in the lobby of a four seasons

somewhere and he bumped into Larry

Frink, obviously the CEO of Black

Rockck, and Larry Frink effectively

mocked him for being a Bitcoin guy.

Maybe this was 2019 or 20, something

like that. He said, "Are you really into

this Bitcoin thing? I don't get it. It's

a joke. Seems like a scam. Seems like a

magic internet money." Larry Frink used

to be very dismissive of Bitcoin. Then

they hired Robbie Mitchnik, the head of

digital assets, who's quoted here, and

apparently he fully orangepilled Larry

Frink. And the next time Anthony

Scaramucci bumped into Larry Frink in a

lobby, he was talking like Satoshi

Nakamoto, which he has continued to do

now. It's the trajectory that most

people go with Bitcoin. Even Michael

Sailor himself was dismissive of Bitcoin

in the early days. Tweeted about it, was

against it. It's okay to have strong

opinions loosely held. And Larry Frink

is one of the loudest and most

compelling voices in Bitcoin and in the

world of finance and his team at

BlackRock continuing to push these very,

very important narratives. Now, these

are a couple stories I'm not going to

spend too much time on, but they're sort

of followth through from narratives that

we've seen before.

Horror Lightning team sounds the alarm

as AI uncovers critical flaws. I know

this is going to be shocking guys, but

uh AI is completely unraveling our

blockchains and our security at the

moment, right? So this is important

because to be clear, there has been no

exploit, right? This is saying that

there are flaws that could be exploited,

but this is lightning. This is the very

popular L2 on Bitcoin that's existed

forever that many, many systems are

built on that allow you to send Bitcoin

and other things cheap and almost

instantaneously. Well, the core

developers have sound the alarm and

basically said stop running your nodes.

Uh there's an emergency update that will

be coming available. So, I mean telling

node operators to take their lightning

nodes offline is a pretty big deal. This

isn't Ravencoin or Harmony Chain. This

is Bitcoin Lightning. Now, once again, I

don't want to be hyperbolic about it.

Nothing's been exploited. Nothing's been

stolen. But I mean this is a big deal

and it shows that you know first of all

they identified it with AI so that's

good. So you have AI on the uh black hat

side and the white hat side but it's

becoming very very hard to have massive

faith in technology and unfortunately in

the crypto world that means that you

have to trust it uh the technology with

your actual money. This isn't just data

or information. It's not just the

internet right? So we're going to see

how all of this develops but obviously a

big issue here. The Bitcoin base layer

obviously obvious not infect not

affected. The warning applies to core

lightning one implementation of the

lightning network. So the capacity

already had massively declined and maybe

this is going to become a issue for for

lightning. On the flip side, one of the

biggest threats to crypto that we were

talking about before AI was quantum and

starkware researcher demonstrates

quantum resistant Bitcoin transaction.

So here what happens? And Starkware says

it has executed the first quantum

resistant Bitcoin transaction on mainet.

This transaction was mined in Bitcoin

block 964,199

through Mara's slipstream service. It

used what's called hashbased security

method designed to withstand a quantum

computer capable of breaking Bitcoin's

elliptical curve signatures. Wow, that

was an absolute mouthful. But what's

important is it worked without changing

Bitcoin's existing consensus rules. This

does not mean that Bitcoin is suddenly

quantum proof. It means that this

specific output was protected. To be

clear, this was a non-standard

transaction that had to be delivered

directly to a minor. And this process

currently costs several hundred. Right?

So, I'm not mocking it. I'm just telling

you that this is the first iteration,

the first evidence that we can have a

quantum proof Bitcoin transaction

without changing anything at the

consensus layer. And that is probably

something that we should be celebrating,

right? I think it's important news. I'm

happy that it's happening. I don't think

anyone believes that this is the final

solution to quantum, but it's

encouraging that we are seeing solutions

to quantum being researched and actually

implemented. So, I uh kudos to Starkware

for getting this done. And you know,

Bitcoin's infrastructure is obviously

facing increasingly complex threats

here, but Coinbase is attempting to make

Bitcoin useful for something very

conventional, which is buying a house.

So, this was obviously announced back in

March, but Better and Coinbase announced

general availability, a first

tokenbacked conforming mortgage to

expand home ownership access for a new

generation of mortgage borrowers. This

is important. So, listen, we covered the

announcement when it actually happened,

but these are true Bitcoin backed loans

with no liquidation risk. Now, are these

perfect? Absolutely not. Are there other

versions of this in the market? Yes, my

friends over at People's Reserve uh have

incredible Bitcoin backed mortgage

products, but Coinbase is the biggest

name obviously in the crypto space and

the fact that they're opening this to

their customers is absolutely massive

and there was a ton of demand for this.

So, I believe that their waiting list

had about 260 million in projected loan

volume before they actually opened the

doors to this. So yes, this product got

a wait list in June and is now generally

available as of uh August 12th, but

really being announced now. And what

happens here is borrowers actually

receive two loans. So you get a standard

Fanny May conforming first mortgage

secured by the home. So that's normal.

What's different here is you get a

separate down payment loan secured by

crypto and a second lean on the home and

then you basically merge them and have

one mortgage payment that you made. So

they carry the same interest rate and

amortization period and are combined

into that one monthly payment. Now what

makes sense here is Bitcoin collateral

must equal at least $250%

of the down payment loan. If you're

using USDC it's 125%. So just to put

some math on that. If you want to

finance a $100,000 down payment you

would pledge $250,000 in Bitcoin or

$125,000 in USDC. So you are going to

have higher payments and this is going

to carry higher interest. But this does

solve the problem that many of us have

faced of having to sell Bitcoin, take a

taxable event just to be able to count

it towards your mortgage. So you're

effectively taking a second loan on the

collateral for the down payment here.

But there's no margin calls, no

collateral topups. Even if Bitcoin goes

down massively, you are safe, which

obviously makes this very different from

other Bitcoinbacked loans, which are

very popular and very cool as well. So,

if you're a Coinbase 1 member, you

receive a 1% closing cost credit capped

at $10,000.

So, I I find this to be uh really really

good news. This is very very important.

Uh I mean, it's funny that you can now

use volatile internet money to buy a

house at record prices with a 30-year

loan. You know, what could possibly go

wrong? But, uh as long as you can't get

liquidated,

really, really, really powerful stuff

here. So if Bitcoin become acceptable

mortgage mortgage collateral advisor and

investment funds also need clear rules

explaining how they can legally hold it

and who can custody these. Luckily we

have a better chairman at the SEC here.

SEC resurrecting US crypto custody

crypto custody rule the previous

administration failed to land. Gary

Gendler didn't get this done. I'm

shocked. In 2023, the regulator tried to

narrowly restrict the places investment

advisors could park clients crypto

assets, but the new approach is still

shrouded in secrecy. So, what happened

here? The SEC has actually sent its

proposed custody rule overhaul to the

White House Office of Information and

Regulatory Affairs, but we have not been

able to read it. Now, if you're around

for the Gendler era, you know that the

last administration did not exactly make

life easy for crypto enthusiasts in the

United States, particularly for crypto

companies. There were very strict cussy

rules. Gendler in trying to push these

rules forward, wanted it only to be

qualified custodians to make sure that

you could only push crypto into the

biggest trusted institutions on Wall

Street and that crypto incumbents would

be completely left out of that

conversation. Well, he did not get this

done, but they had this rule, SAB 121,

that actually effectively did the

opposite. It forced every custodian to

not only have if you had Bitcoin on the

balance sheet, it was considered a

liability. So, they needed to raise cash

on the other side to match those

liabilities. And none of those

custodians could hold it anyways. It was

a complete mess. That was reversed by

this SEC. Well, now, yes, this is

shrouded in secrecy. Secrecy, but Atkins

is calling this actually deregulatory.

That was the term that the regulator

used said that this is deregulatory.

Um it stated objective is to clarify

crypto custody while removing outdated

regulatory burden. Sounds like a lot

more companies are going to be able to

custody these assets and we all know

obviously that the trust charters have

been extended to a lot of crypto

companies. Anyways, now a very quick

mention just to follow up on our

prediction market stories we've been

telling. Connecticut sues Kalshi over

sports event contracts in month-long

legal feud. I know you're shocked that

I'm once again telling you about a

battle between the states uh and Khi and

then of course the federal government,

but the CFTC is actually already suing

Connecticut for this. I've told you

these stories, but Khi effectively goes

into a market with a sports product. The

state bans them, they take it down. The

CFDC then comes in. they execute

emergency powers, tell Cali to turn it

back on and Calcia has no idea if

they're supposed to listen to the

federal government or to the state

regulator. It's very, very confusing and

it is going to continue happening. I

don't think there's any question about

that. So, Cali here is fighting over

what qualifies as a financial product.

But meanwhile, in our next segment,

Bithham in Korea is fighting users who

sold $43 billion of Bitcoin that never

existed. What could that possibly mean?

It's our next segment for How Not to

Invest. Hit it.

>> How to invest.

>> How to invest.

>> It's not really a How Not to Invest. I

just love the music. It's just we now

use How Not to Invest as a catch-all for

ridiculous stories and I'm here for it.

But you guys may have missed this, but

in February, Bithham intended to

distribute promotional rewards to their

customers denominated in Korean Juan. uh

instead, if you don't remember this, the

employee entered bit BTC instead of KRW

and they credited 620,000

Bitcoin to their customers. That is 3%

of Bitcoin's entire entire maximum

supply. And since it was fake Bitcoin, a

bunch of people saw it in their accounts

and immediately sold the imaginary

Bitcoin. And now Bitub is suing their

own customers for their own mistake to

get the money back. The latest defendant

was ordered to return approximately

$140,000.

So, uh, this incident also triggered a

regulatory investigation into Bithham's

internal controls and risk management.

Another how to invent nonsense story.

Absolutely crazy out there. I'll look

forward to seeing what crazy story we

can come with up with for tomorrow. See

you then. Peace.