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 of 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 all coins 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 all coins, just during this 8-day streak.
August inflows now exceed 3 billion, making this the strongest month of 2026. Now, you may remember if you ever looked 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 BlackRock'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 BlackRock. BlackRock's Mitchnick says macro case for Bitcoin is strengthening after record trading in positive week. So if you don't know Robbie Mitchnick is the BlackRock head of Digital assets. 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 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 the insanity that's happening on the fiscal side at Treasury with Scottt. 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 it was in the lobby of a four seasons somewhere, and he bumped into Larry Fink, obviously the CEO of BlackRock, and Larry Fink 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 Fink used to be very dismissive of Bitcoin.
Then they hired Robbie Mitchnick, the head of digital assets who's quoted here and apparently he fully orange pill Larry Fink and the next time Anthony Scaramuchi bumped into Larry Fink 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 Saylor 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 Fink 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 follow through from narratives that we've seen before.
Core 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, obviously is not infected, not affected. The warning applies to core lightning, one implementation of the lightning network. So, the capacity already had uh, massively declined and maybe this is going to become a uh, 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 Starkwere researcher demonstrates quantum resistant Bitcoin transaction. So here, what happened? Starkwere says it has executed the first quantum resistant Bitcoin transaction on main net. This transaction was mined in Bitcoin block 964,199 through Mara's slip stream service. It used what's called hash base 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 dollars, 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 Starkwear 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 of first token-backed 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 back 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 back 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. You get a standard Fannie May confirming first mortgage that's 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 make.
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 $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 top ups, even if Bitcoin goes down massively, you are safe, which obviously makes this very different from other Bitcoin backed loans, which are very popular and very cool as well.
So if you're a coinbase one 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. 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 can become acceptable mortgage collateral, advisors 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 Gensler 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 Gensler 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 custody rules. Gensler 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 the 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, but Atkins is calling this actually de-regulatory. That was the term that the regulator used. Said that this is de-regulatory. Um, its 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 Kalshi and then of course the federal government. But the CFTC is actually already suing Connecticut for this.
I've told you these stories, but Kalshi effectively goes into a market with a sports product. The state bans them, they take it down. The CFTC then comes in, they execute emergency powers, tell Kalshi to turn it back on and Kalshi 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 Kalshi here is fighting over what qualifies as a financial product. But meanwhile, on our next segment, Bithumb 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.
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, Bithumb intended to distribute promotional rewards to their customers denominated in Korean Won. Uh, instead, if you just remember this, the employee entered BTC instead of KRW and they credited 620,000 Bitcoin to their customers.
That is 3% of Bitcoin's tire entire maximum supply and since it was fake Bitcoin, a bunch of people saw it in their accounts and immediately sold the imaginary Bitcoin. Now Bithumb 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 Bithumb's internal controls and risk management.
Another how not 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.