Nothing in this market is be is behaving quite the way that it's supposed to. Gold and bonds are failing to be a hedge, small caps are making new all-time highs and Bitcoin, of course, refuses to die. So today we're going to break down a market where it seems that liquidity matters much more than logic. And of course, we're going to unpack all the biggest stories of the day. Let's go.
What is up everybody? Welcome to the Daily Wolf on Yahoo Finance. I am your host, Scott Melker, also known as The Wolf of All Streets. and we're going to spend the next 15 minutes diving into the biggest stories in crypto and macro today, trying to make sense of them and figuring out what might be signal and what might be noise. And man, there has been so much noise in the markets of late.
I was recently asked, where are you putting your money? How are you investing? Where do you think the market is going? on a coinbase podcast, and I made the claim that this was effectively the most confusing market that I've ever seen in all of my almost 50 years on the planet. So I started to dig into some of the data and I'm certainly not the only one who is very confused and doesn't understand why markets are behaving the way that they are.
If you take a look here, the end of last year, the World Uncertainty Index, Global GDP weighted average hit an all-time high and it wasn't even close. You can drill into this chart and see where it was during COVID under 60,000. It almost doubled that, meaning that people around the world have absolutely no idea what's going on and feel uncertain about almost everything. And who could blame them?
We get different headlines every single day about what's happening in the war. We can't trust a tweet or a truth from basically anyone because it gives us conflicting information from what we just saw yesterday. And markets aren't reacting any better. We would think that right now in a time of geopolitical strife, gold would be making all-time highs, bonds would be a safe haven, but instead we're getting maximum risk. We have the Russell 2000
hitting a new record high yesterday. For those who don't know, this is small caps. This is the riskiest corner of the stock market, following the rest of the market and making a new all-time high.
Add that to the fact that we just had a 10% drawdown in the market after the war started, and then the fastest V-shape recovery in the history of the stock market, and then making new all-time highs. And it seems that everyone's expectation is that every single dip is going to get bought, that markets can only go up, nothing bad can literally ever happen.
So right now I think that there's mass confusion and the assets that you would expect to be performing in a certain way are not. That said, this brings us of course to Bitcoin and I would make the argument that Bitcoin gets a very, very unfair wrap in situations like this. People on the news go on TV and they say Bitcoin is maximum risk on asset. It trades like a tech stock, it dumps every time there's geopolitical uncertainty.
I'm going to take a look here first, just for the unfair treatment of Bitcoin at what's happened of late. Bitcoin topped at $126,000, came down back below 60,000. That took about 122 days. and Bitcoin drew down about 52, 53%. On the right, I have the chart of silver, which made it a new all-time high at almost $125 and then dropped almost 50%, about the same as Bitcoin in a week.
Now, I tune into the media and all I hear is about the brutal Bitcoin market, but nobody's talking about the brutal bear market in Silver, which had a more aggressive drawdown in far less time, just as hard and has failed to recover much better. So, when you take a look, you wonder why Bitcoin gets this unfair treatment? because here's the facts.
Bitcoin outperforms in every crisis. This isn't my opinion as a biased Bitcoin maximalist, which I'm not anyways. These are the cold hard facts going back all the way to January 3rd of 2020. After 60 days, except for in the yen carry trade where Bitcoin still was up in the green every single time, we had Bitcoin outperforming every other market and it's not even close. US-Iran escalation 20%, COVID outbreak 21%.
Oh, by the way, everybody talks about the raging stock market after COVID, how it pulled a 2X off of those March 2020 lows. Bitcoin went up 17X from there from under $4,000 to $69,000. The US banking crisis, 32% for Bitcoin. That's when Silicon Valley Valley Bank failed and naturally people rushed to Bitcoin in that situation. And right now in the Iran conflict, we have stocks up a few percent.
Gold, which is supposed to be the ultimate hedge, is down 8%, and Bitcoin is up 12%. And this guy is going to explain to you why. And if you're wondering who this guy is, this handsome gentleman, like perfect hands, beautiful tie, haircut that I would die for.
This is the guy that was in the Charles Schwab video yesterday, who was educating Charles Schwab customers on the risks of Bitcoin in their portfolio. Now I I obviously told you the story yesterday about how Charles Schwab is offering Bitcoin and Ethereum spot trading to their customers and how that's coming soon. Well now they're getting ahead of that by explaining the risk. And he basically broke down how much Bitcoin you should have in your portfolio. Now, anyone who manages a portfolio knows that having any asset that's uncorrelated to other assets
that offers idiosyncratic risk is effectively the holy grail for your portfolio. Having 1 to 5% of something that has a chance to do something other than what everything else is doing, helps your sharp ratio massively. Now, sometimes an uncorrelated asset actually goes down when everything else goes up and you feel like an idiot. But it's still very good for your portfolio construction. And that's what he explained in this video, where he actually said that for their more aggressive investors, the appropriate Bitcoin allocation could be 6.9%. He was about two or 3% for their more moderate uh risk
adjusted investors. Think about that. There was a time recently when we thought, wow, it would be a huge move if we would hear BlackRock or Morgan Stanley or JP Morgan say, you should allocate 1% of your portfolio to Bitcoin. Now we have them saying 3% if you're not aggressive and up to 7% if you are. And they didn't even talk about the upside of having it in your portfolio.
So, we're in a regime very clearly right now with all of this insanity where liquidity is trumping logic, right? We talked about why markets are all over the place. We have no idea logically why certain assets would be up and certain assets would be down. But what we do know is that liquidity drives all of it, and there's an expectation when there's bad news, because we live in the Stranger Things upside down, that liquidity will come in because of the bad news because governments will intervene, they'll start printing money,
they'll have the Fed cutting, and naturally risk assets will go up, which of course helps rich people and disproportionately hurts poor people. That's what's likely coming, liquidity out ranking logic. And we know where the liquidity is coming from for Bitcoin. Spot Bitcoin ETFs cross 1 billion last week in inflows as cumulative flows approach record highs. It's very transparent. People are buying Bitcoin all over the place through multiple vehicles and the ETFs are becoming extremely pop
popular. Let's remember these are the most successful ETF launches of all time of any product. These things are holding a massive amount of Bitcoin and the inflows just keep coming even with Bitcoin price still depressed about 40%. I don't want to go too deeply into who else is buying because we had a long conversation about it yesterday, but I do think that it's notable that Michael Saylor and Strategy now own more Bitcoin even than the BlackRock Spot ETF. BlackRock holds about 800,000 Bitcoin on behalf of their customers.
Strategy now holds about 115,000 Bitcoin, not counting whatever he's likely bought this week. And we we talked about this yesterday, so finally I got a picture. Michael Sailor sucking up all the Bitcoins out of planet Earth. Mega made right there. kudos to my team for finding an image of that. I didn't think that they'd be able to. But absolutely unbelievable what this guy is pulling off. He's just absolutely sucking up all the Bitcoin out there. When you add his almost million Bitcoin to Satoshi's burned million to the other 4 million they're likely lost
to the amount being held by ETFs, there's not really that much Bitcoin left for you to buy. And when that demand continues to increase with the reducing supply, there's only one way the price is going to go up. And in a in a bare market, which I would argue that we are in right now, you can always see this trend of weak hands selling their assets to strong hands. This is not unique to Bitcoin, it happens in every market. Take a look at this chart.
In Q1 of 2026, businesses purchased 69,000 Bitcoin, governments purchased 25,000, funds and ETFs bought 3,000. And who sold their Bitcoin? individuals. And if you actually dig into the data more, it's mostly individuals who are underwater who bought at the very top and decided they couldn't take the pain anymore and bought at the bottom. This is what happens at the bottom of bare markets.
I'm not saying that 60,000 has to be the bottom, although if I had a gun to my head, I would say that it is. But this is the kind of behavior you see, which is that the smart money starts to buy and the dumb money sells it right into your hands. And you want to know who has really strong hands? Charles. This guy over at Charles Schwab, huge hands. And and talking about people who definitely have strong hands, we've got another story today.
We have Kevin Warsh on the hot seat right now at this very moment, facing the evil villain Elizabeth Warren in a Senate confirmation hearing. But that's not really the story that I want to talk about. What I want to talk about is that last week we saw what Fed Chairman Warsh, likely Fed Chairman Warsh is holding in his portfolio. and this guy is a massive crypto degen. It's crazy. Fed nominee Warsh holdings include SpaceX, Polymarket, crypto and AI has over 30 crypto investments.
He also has incredible hair. I mean, look at that helmet. I never miss a chance to make a Spaceballs joke. The guy has incredible hair. He looks exactly like Dark Helmet from Space Balls. But this guy's worth $192 million in his disclosure and that's alone. If you add his net worth to his wife's, who is famously the granddaughter of Estee Lauder. He's worth billions and billions of dollars.
And a proportion of that, over 30 crypto investments and even more in prediction markets and beyond. Now, many people will sit on the Senate floor, I'm sure today and say that he has conflicts of interest, that he's going to be a Trump sock puppet. He actually had to say in the hearing this morning that he is not a sock puppet, a human being with hundreds of millions of dollars of net worth had to say that on the Senate floor. That's where we are in the simulation right now.
But we have a potential Fed chairman, we have an SEC chairman, a CFTC chairman, human health services, every seemingly major position in government is someone who deeply believes in Bitcoin, understands it and has touched it. Now, the person that I want in charge of monetary policy should actually understand the assets that people hold and that people want to hold and how to manage regulating and legislating those. So having someone in power who's actually touched all of these assets, has meaningful net worth and believes in it can only be a major positive for the industry.
Now the next story that we have here is worthy of a Clancy novel. I had not seen this story, but when I did, I had to dig in further because it's absolutely crazy. So, right here we have Zonda Crypto, which I'm going to admit I'd never heard of, under fire as Poland's Prime Minister links exchange to legislative interference. So, first of all, the first thing I did was I googled Prime Minister of Poland to see his thoughts.
And you know that we have a president, his name's Donald Trump. Their prime minister's name is Donald Tusk. So when I Google him, Donald Tusk. Donald Trusk, Trump and Tusk. Like I said, we live in the simulation. But this goes all the way to the highest levels of government, the Prime Minister of Poland. I'm going to just quickly tell you the story. So on chain analysts pointed out the fact that the hot wallets of this exchange, the most popular in Poland had effectively no money left in it.
When this became public, obviously, the users did exactly what they did. They went on a bank run and they tried to withdraw, and they were unable to withdraw their assets. We've seen this movie before, unfortunately in crypto many, many times, and beyond in banks as well. But what then happened is crazy. The CEO of the exchange made a public statement saying we have 4500 Bitcoin in cold storage. Whoa, whoa, whoa. There's nothing to worry about here.
We've got 300 million in cold storage. The only problem is we don't have the private keys to those wallets. And then he came out and said we purchased this exchange from 2021 and the previous owner never gave us the private keys to the wallets. Can you imagine buying a business but they don't actually give you the login to the bank accounts? Because that's effectively what happened here. And obviously people said, well, just go get the private keys from this guy.
This guy literally disappeared after making this transaction. They've not been able to find him for years. And if you think that's the craziest part of the story, as I said, it got all the way up obviously through the regulators and the legislators to the Prime Minister, Donald Tusk, who has said that he views this exchange potentially as a Russian interest and that it was being used to fund his political opponents uh, in a campaign against him and against sensible crypto regulation. You can't make this stuff up.
I I honestly, almost hard to believe that this is real. But in a final story, just what I want to touch on very quickly that's sad. My friend G Love lost $424,000, six Bitcoin uh in a scam. Just to tell you the story very quickly. He went on his computer, downloaded what he thought was the real ledger app, and he entered his private keys and his coins were gone. You never enter your private keys into a hot uh browser anywhere except for into your wallet.
a cautionary tale that apparently this same hack has gotten about $12 million dollars out of users. The Apple app store, it's a shame that's in there. They should be prosecuted, but that hasn't happened yet. Listen, Bitcoin performs exceptionally well in a crisis as I showed you and there's plenty of reason to believe that we're going to get more liquidity than logic in the near future, which is the best reason I can possibly give you to go ahead and buy more Bitcoin. That's all I've got for you today on the Daily Wolf. We'll see you tomorrow. Peace.