00:00 Scott Melker
Michael Saylor’s Strategy sold 216 million dollars worth of Bitcoin last week. And while he was doing that, Tom Lee’s Bitmine bought some Ethereum. We have two treasury companies going in opposite directions. Those are just two of the stories that we’re going to dig in today on The Daily Wolf. Let’s go.
00:28 Scott Melker
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 I know you’re expecting to spend the next 15 minutes with me talking about what’s happening in the market. But I’ve decided to rebrand as a World Cup show because the United States will face off with Belgium tonight. And they’ve made a huge announcement. We actually have a new referee in that game. There he is right there. Checking the VAR.
01:08 Scott Melker
Doing his due diligence and figured it out. Yes, the big controversy of the day obviously is whether Trump impacted the red card. And I think we have more stories to talk about with Trump impacting other markets today. We’ll dive into that. I actually heard a rumor that if we’re losing to Belgium in the 90th minute, uh, SEAL Team Six will be dropping onto the field.
01:39 Scott Melker
But we are going to start with something a little, uh, less exciting, which is this right here. Strategy Sells 3,588 BTC to Fund Digital Credit Dividends, Now Holds 843,775 and 2.5 Billion dollars. That 2.55 billion dollars right now is the meaningful number because the criticism of strategy obviously was that he sold
02:18 Scott Melker
or that he bought, I should say back a convertible note that was not due for a few years by depleting the USD that was in their cash reserves to pay off dividends of STR C and the other preferreds. Well, now up to 2.5 billion dollars. It takes roughly 1.7 billion a year. So, you know, he’s pushing up to almost two years of coverage for all the expenses that they may have down the road. But still,
03:07 Scott Melker
last week, we saw strategy laying out a framework for what was likely to happen in the future with strategy, going from that, uh, going from the tactic that they had in the past, which was just to simply raise cash to buy Bitcoin, no matter what, which is what they always did and no matter at what price, to now being a full capital stack that they can utilize to financially engineer their balance sheet. Things have gotten a lot more complicated. And now, as he showed us with his $32 Bitcoin sale a few weeks ago,
03:49 Scott Melker
Saylor very, very willing to inoculate the market further by selling more. As you as I said there, 216 million here. Interestingly, that’s about a $60,000 average per token. Uh, this is an example obviously of buying high and arguably selling very low, which uh I don’t highly recommend for you as retail. He will be able to use this for some tax lost harvesting.
04:32 Scott Melker
Now, he always said never sell your Bitcoin. That was the uh the the motto that he lived by and then of course it changed from, I’m never going to, I never said I’m not going to sell our Bitcoin, you should just never sell your Bitcoin. To now obviously selling some of Strategy’s Bitcoin. Listen, I think that he had to do this. Actually, what I was anticipating and hoping for
05:07 Scott Melker
was after last week’s announcement of the new framework that they would just kind of sit back and do nothing for a few weeks. That Saylor would not be the main character anymore, that we would stop talking about him. Well, he did go ahead and sell and raise some more cash. Uh, I’m a bit surprised that that was the tactic here, but seemingly the market didn’t care very much, which is generally a good sign. It’s going to be very interesting actually to see what happens with STRC
05:46 Scott Melker
over the coming days because I think that has been the key lynchpin in how people are viewing strategy. If it can float back up to par around $100 because they’ve raised more cash, because it gives the market more confidence and because that dividend is now 12% and the yield effectively is even higher. That could turn back on the Bitcoin buying machine and all could be absolved. But Saylor is not the only buyer and seller of crypto assets by a Treasury company in the market.
06:23 Scott Melker
We have the guy with the amazing hair. And his hair is down here. Really interesting. I don’t think I’ve ever seen it in the face. We’ve always talked about it being up. Bit more Bitmine added another 74 million in ether as Tom Lee bets on Clarity Act boost. Okay, that that back half seems like nonsense because nobody right now is handicapping the odds of the Clarity Act passing at higher than 50%. This has been his strategy all along. So I think that there’s a nonsensical narrative. But more importantly, Tom Lee is not stopping his strategy has not changed at all.
07:16 Scott Melker
He is still finding more ways to buy Ethereum and now is rapidly rapidly approaching his goal of owning 5% of the supply. Strategy actually getting relatively close uh before this sell to owning 5% of the Bitcoin supply as well. So, they bought 42,197 ETH. $74 million. This lifts their holdings to 5.74 million ETH, about $10 billion, which is 4.8% of all ether.
08:04 Scott Melker
Like I said, getting very, very close to that 5% target that we were talking about. So, right now we have two Treasury companies that are going in opposite directions. That said, I believe that strategy will soon be buying Bitcoin again. Interestingly also, Ethereum has underperformed the market down, I think roughly 40% and in the short term here has been starting to rise even as Bitcoin has traded sideways
08:44 Scott Melker
or languished. And there may be a reason for that. One of them obviously is Tom Lee. But the second potential reason for that is this. Ethereum reinventing itself with the biggest overhaul since the merge. One, Vitalik Buterin. Nearly every core piece of the protocol will be rebuilt over three to four years with quantum safety and privacy moved front and center. So, listen, if you have not been tracking what’s happening with Vitalik Buterin, Ethereum, and more specifically the Ethereum Foundation, you should be. We’ve been talking about it here.
09:32 Scott Melker
There’s been a bit of an existential crisis over the past year or even longer you could say, uh, for Ethereum. The Ethereum Foundation was long viewed as the driver of the machine that was determining how Ethereum would be developed, how it would be utilized. And right now we’ve seen a huge departure of executives from the Ethereum Foundation. Buterin himself recently said that the Ethereum Foundation would effectively become just another node, just another part of the network, it would become more decentralized,
10:23 Scott Melker
and that it would have less impact moving forward on how Ethereum was built. But interestingly here, I mean, like I said, you have Ethereum down 40% and the plan is to basically rebuild the entire engine while doing 70 on the highway. So it’s a bit scary here. They pulled it off when they went from proof of work to proof of stake with the merge, but this may actually be the only move left is to reinvent Ethereum so that it makes more sense for how blockchains and protocols are needed into the future.
11:09 Scott Melker
So this is uh for for the nerds out there. They’re going into Stark proof verification. Nobody knows what that means. Quantum safe signatures by 2029, radical simplification, potentially 10X lower fees. And as I said, this lands as the Ethereum Foundation cut 20% of its staff and had that major uh exit of executives across the board.
11:51 Scott Melker
This is the first time, by the way, that we ever had three straight red quarters for Ethereum, which just happened. So maybe we’re starting to actually see some bottoming signals. The the cat the caveat here is that this is a draft roadmap. There is no official schedule here, even though he loosely said three to four years. A lot of insiders are saying three to four years is way too slow. I mean, if you consider that crypto years are like dog years, probably worse. I mean, a year in crypto feels like a thousand years,
12:35 Scott Melker
right? But if it’s like dog years, it’s seven years. Three to four years is 21 years, it’s 28 years. That is a really long time, especially when you have other protocols moving fast, cheap and breaking things and eating Ethereum’s lunch. I imagine where Solana and all of these corporate blockchains we’re talking about will be in three to four years. I think that this has to happen much faster. I think it’s likely that it will, but I do think that Buterin has realized that the market was not happy with Ethereum and is saying all the right things to get this done.
13:21 Scott Melker
Now, we have another exciting continuation of a story from last week. Nearly a million investors lost a total of 3.8 billion on Trump crypto coin. He’s calling a foul. Calling a foul. There he is. Look at him. Nearly a million investors, 3.8 billion. So, we had a uh deep dive by on-chain analysts after the scathing uh articles of last week that showed just how much money Trump had made in the crypto market and just
14:24 Scott Melker
how much money at least on paper, people had lost by investing in them. Well, this is specific to the Trump token now. We have 988,905 wallets, just shy of a million individual wallets are down 3.81 billion with a B dollars. Interestingly, the 492,000 early buyers are up $4 billion. The token’s down about 97% from 73 to $1.79,
15:20 Scott Melker
but the insiders who knew it was launching and bought under a buck are still, well, they’re obviously still in profit because it’s trading at over a dollar. Many of these bought at pennies. So we once again have a story of insiders even with a 97% drawdown up significantly on a token that almost everybody else lost on. 300 3.81 billion dollars in unrealized gains right now or unrealized losses.
16:03 Scott Melker
Unrealized losses right now on Trump Token. I don’t think that anybody truly believes that this thing is coming back. It’s going to go back up anytime soon. So, uh, probably lick your wounds and move on with your lice- life, unless, of course, you think that he will recall the red card on Trump Token. The next story we have here is a really interesting one. Americans Americans traded $571 million on Polymarket politic bets, I always said political bets, despite US ban.
16:51 Scott Melker
So in case uh you didn’t know this, Kalshi is legal in the United States. Polymarket right now not available to Americans. That didn’t stop them from spending $571 million betting on political outcomes in the United States. Uh, now it’s not the same thing, but I am old enough to remember that one of the biggest criticisms of Binance and part of the reason that CZ actually went to jail was because they allowed American users to use their exchange without proper KYC and AML.
17:40 Scott Melker
Well, how the hell do Americans use a platform in America uh, for 571 million bucks without access. Of course, they did it with a VPN. Now, telling Americans not to do something, uh, is about as effective as a screen door in a submarine. It’s not something that you’re going to you can’t stop Americans. Don’t don’t use gas powered cars Americans, right? We’ll be driving around and every one of us will be in Grave Digger or Bigfoot, you know, with American flags coming out the top.
18:27 Scott Melker
That’s how we roll in the United States. But really interesting that now that prediction markets are in vogue, everybody’s launching them. The CFTC is a huge champion of these things. Well, you don’t get in nearly as much trouble for allowing Americans to circumvent the rules and to trade on Polymarket. So, it’s going to be interesting actually to see how with time prediction markets shake out. I’ve long told you about the battle that we’re having here between the states
19:07 Scott Melker
and between the federal government. But it’s very clear that if you are US based, uh you’re not going to get in nearly as much trouble. Now, to be fair, they did pay a fine, if I recall correctly, and there was a point where the FBI did raid Shane Chaplin’s uh home. So there was a time in the previous administration where this could have gone much worse for Polymarket. But right now they’ve allowed Americans to trade there in massive size on American elections and uh,
19:54 Scott Melker
seems like it’s going to just be totally fine. And now, you know, we have my favorite segment, which is how not to invest. Hit it.
20:10 Scott Melker
Now, we know that the way how not to invest, some would say that strategy was doing the how not to invest by buying the top and selling the bottom, but they’re not the only ones. Stool President, one Dave Portnoy, great pizza reviews. Bitcoin news, Dave Portnoy vows to hold Bitcoin to zero after buying at 100k. So, if you’ve been tracking him throughout time, you know that he has a long record of showing his emotion live on video stream and always buying the top and selling the bottom.
20:53 Scott Melker
Well, in this case, he bought Bitcoin over $100,000 and is now at this point saying he will ride it to zero, never sell. So, first of all, I don’t think Bitcoin is going to zero, so I don’t think that this is going to be a problem, but he’s basically like in a hostage negotiation with himself at this point. Right? He’s like, no matter what happens, I’m going to ride this thing to to zero with absolutely no plan or reason that I bought it over $100,000 in the first place.
21:40 Scott Melker
Now, the how not to invest part is don’t buy the top, don’t sell the bottom, and don’t do any of that without a plan, and then when you are down massively, decide that you’re going to cope and hold no matter what. That’s the crypto path, right? You start as a trader, then it goes down, you move your stop loss because you don’t want to lose, then you become an investor, then you become a passionate community member and a bag holder.
22:27 Scott Melker
It’s going to be interesting to see what happens with Treasury companies moving forward. Maybe Saylor is finally giving the signal and it’s going to be a positive because we’re not concerned with what he does anymore into the future and the market can move freely without him. It’s all I got for you today. We’ll see you tomorrow after the USA wins. Peace.