Wall Street's Warning Lights Are Flashing. Banks Can't Agree On What They Mean

Here's the theme of the show today. Nobody can agree on anything, not the banks, not the analysts, not Congress, not even the people who read the blockchain for a living. I'm going to tell you four or five stories where this is the case. Stick with me, it's going to be a good one. Let's go. What is up, party people? Welcome to the Daily Wolf on Yahoo Finance. I am your host, Scott Melker, also known as the Wolf of all streets. And we have a lot of confusion in the markets, in the analysis, in the narrative, and a hell of a lot of healthy and unhealthy debate as to what's going on both with Bitcoin price, the economy, and certain events that have happened in the market. Now, this is obviously a crypto-based show, but you can't talk about crypto anymore without looping it into macro. That's been the entire ethos of my show. That's been the entire ethos of my YouTube channel is tying Bitcoin into the macro and where it fits. And right now, we have to take a look at what is happening with broader markets and the narratives because we have nobody agreeing on anything, as I said. So here's the first thing I want to show you. We've got Wall Street's warning lights flashing right now. Banks can't agree on anything. Stock Market Warning 2026, Citibank risk flags reach post-2008 high as Nasdaq drops 4%. This was obviously the other day, but this was a big story saying that 11.5, I don't know how you have half an indicator, but 11.5 of their 18 risk flags are flashing saying that we are likely going into a bear market and it's not just Citibank. We have Bank of America warns it's time to take profits as red flags multiply. They're saying that 70% of their indicators, 17 of 20 metrics are showing that we're about to get a massive dump and that eight of those indicators are worse even than in the tech bubble. And of course, we have the Buffett indicator here, which is a US total market cap percentage of GDP. Stocks are now worth 2.4 times the entire US economy at 238%, well past the peak of the dot-com bubble. We have the S&P Shiller, Cape 40, only seen at the 1999 dot-com top, and BNP Paribas going out on a limb forecasting three back-to-back Fed rate hikes starting as early as December. Now, we all know that Kevin Warsh was brought in to be the old sock puppet for Donald Trump. And to make sure that we get a loose economy, that we lower rates and we get back to Zerp, well, you now have people out there literally pricing in rate hikes because of fears of inflation coming back in the near term. And listen, I'm gonna show you now a few examples or just tell you of the people who are saying that's completely wrong, you need to chill. Cuz like I said, nobody can agree. So we got Goldman Sachs saying that hikes are still unlikely despite the hot job print that we had last week. JP Morgan is saying that double-digit equity gains in 2026 with only 35% recession odds. Bank of America, who I just told you, said sell everything and take profit. Their CIO is saying higher yields are tolerable, it's not recessionary. And of course, Morgan Stanley's base case is an S&P up 10% this year. And poly market only has recession odds at 18%. So this level of disagreement is the smoke, right? We say when there's smoke, there's fire. Well, the smoke is that nobody can agree on anything and the match that lights the fire could be a hot CPI print coming in tomorrow. So we're gonna be watching that very closely. Of course, nobody actually believes the calculations of CPI or their government in general when they provide us data. And we know that they can conveniently change how those things are calculated, or they just go change them into the future. But markets trade on narratives and markets trade on expectation versus actual data. And the expectation is that inflation could start to come in hot once again tomorrow for another month. And that, whether we like it or not, certainly can inform which way Bitcoin and crypto markets tend to go in the short term. We know that if everything sells off, if there's a black swan event, the correlations go to one and everything tends to sell off together. So we're gonna be carefully watching the macro with inflation expectations beginning to rise. Now, I've been unpacking this one for days and I have a feeling that we're gonna be unpacking it for weeks and months to come. It's of course the narrative as to why Bitcoin sold off so hard last week and why we failed to have a major bounce so far. So, Saylor went with the prevailing narrative, blaming AI for the Bitcoin crash. I've talked about this. I think that there's definitely some truth to it. Obviously, the hot ball of money has flowed into tech and AI. We have countless examples of this being the case. And now we have not one, not two, but three massive IPOs coming. SpaceX, Anthropic, and OpenAI yesterday just announcing privately that they will also be seeking to go public in the not so distant future. That money has to come from somewhere and could be a part of the sell-off. Now, of course, as I showed you in that article, a lot of people are calling it gaslighting from one Michael Saylor, saying he sold 32 Bitcoin. That was the signal that he could become a force seller in the market. A lot of this coming from ARCA. And there's Chief Investment Officer Jeff Dorman. I've been going at it with Jeff Dorman on X, taking the other side of his arguments because I don't believe what he's saying. I think that the doomers right now see 32 Bitcoin, which is a tiny signal as a reason to say that the entire capital stack for Saylor and strategy is failing. The question I cannot get an answer to, no matter who I ask, is what if the price of Bitcoin simply goes up? If the price of Bitcoin does not die, as the doomers believe it will, and Bitcoin goes up, it solves almost every single problem, if you believe that they have one, that Saylor is having here, right? If it goes up, leverage reduces. MNAV goes up for strategy. STRC floats back to par. They can buy more Bitcoin. And as a company, they only have 10, 11% leverage on the entire stack. So I think that there's a lot of panic. These are the kind of things you see at a bottom, not a top. And when Bitcoin's back in the hundreds, this will all be quite laughable. But there is one more take, and that's from my friend Marcus Thielen at 10X Research. Blame Bitcoin's tumble on rising inflation, not strategy, 10X Research argues. So he goes on to point out something that people hate, which is, I call them facts. I know it's strange when we get facts, sometimes they conflict with the narratives. But we had 5.4 billion in net redemptions on the ETFs over that long stretch. In that same time, strategy bought $2 billion in Bitcoin. Strategy is not the problem, as he said. Follow the money, not the narrative. Literally, the guy who bought and probably sustained the market when there was all this selling pressure is Saylor and strategy. But somehow, they're to blame for the sell-off. The one, carry the two, quadratic formula seven, none of it makes sense. It's like the guy from the show, and he's trying to figure out the conspiracy theory. Everybody wants to blame someone when price goes down. And right now, Saylor is the convenient narrative. Now, I would like to remind you of something. I'm not saying that history will necessarily repeat itself in this case. But many years ago, at the dead bottom of the market at 15,000 after FTX, Michael Saylor and strategy, at that time, MicroStrategy, sold a bit of Bitcoin to harvest some tax losses, bought a bit back. And the prevailing narrative was that he was over leveraged, he was going to get liquidated, and everything was going to die. $60,000, sells a bit, buys a bit more back. Everyone's saying that he's over leveraged, and it's going to zero. I'm not gonna say I see a similarity, but I'm gonna say, I see a similarity. Seems pretty obvious that it's the same kind of situation. Nothing has changed for strategy in the past few weeks, except for the narrative. But we do have something that is changing. And one more case where we can't get people to agree on anything. It's obviously Congress over literally anything, right? I mean, we've got the full text of the Strategic Bitcoin Reserve that's officially been published. There's some great hits in here. So we know that this is the ARMA Act. This is not the Bitcoin Act, it's replaced the Bitcoin Act. And none of us believe that we're getting a Strategic Bitcoin Reserve in the near future, but it's good to see that this is hitting committee. But interestingly, you get a 20-year lockup on the Bitcoin that the United States is either holding or would buy. So I mean, we have Congress saying that they want you to hold Bitcoin for 20 years when they can't even agree on a budget for 20 days, which is bold, right? But 20-year lockup on all of the Bitcoin that would be audited quarterly and presented to the public, imagine that. We would actually know how much of an asset the United States government holds. Interesting because we have not gotten an audit on the gold in Fort Knox. Many people believe it's not even there. Even the president demanding the audit, he's the president and can't get an audit, that seems suspect. But in the executive orders of last year surrounding crypto, we were also supposed to get an audit on how much Bitcoin the United States government held, how much of other crypto assets the United States government held, and we still have not gotten clarity on that. So that obviously, in theory, if this bill somehow managed to pass, would be huge. There's also a rule in here that if they began to sell in 20 years, they could only sell 10% every two years. They would not be able to market dump all over retail, right? And they also codify the fact that there will be no new borrowing taxes or deficit spending, which is the narrative that the president had pushed forward. He would like us to seek budget neutral ways of buying Bitcoin. So listen, the news here is that this is heading to Congress. The thing nobody can agree on is obvious. It's basically Democrats versus Republicans, and they can never agree on anything. Now, we had another major exploit in crypto, unfortunately, and that's this one right here. Humanities, 36 million exploit tied to compromise laptop hosting a multi-sig wallet. So this was one of the biggest movers, made an all-time high recently, even in the face of a bear market. What this company does is the Humanity Protocol scans your palm to prove that you're a real person, which is very important in an AI world. But the one identity they forgot to verify was the guy holding the keys to the mic. So listen, I'm friendly with these guys. I actually spoke with the founder this morning to ask him what happened. And he said basically that there was a multi-sig exploit. As it says here, the multi-sig was created on a single computer and then dispersed. Well, that single computer has been compromised and gave access to all of those things, which they did not think was possible. So you can have an incredible project, incredible idea once again in crypto, but if you have terrible security, it effectively becomes irrelevant, sadly. And this adds to a long line of DeFi hacks. But remember I said the theme, nobody can agree on anything. You have one narrative all over X that this was an insider job. I do not believe that for one second. Because if insiders want to make money on a project, they don't crash the price 90% by market selling. They would just slowly sell it while price was high and make a lot more money, just makes no sense. This is just yet another exploit where somebody exploited the two bridges. They stole all of the coins that were on Ethereum and they were able to actually mint new coins on BSC and market sell those into the exchanges. Yet another sad story of a massive exploit. That said, last I checked, the price had actually bounced to prices from just a few days ago before the massive move to the upside. So clearly, since those coins that were fake have been sold off, the market is absorbing this and dealing with this. And of course, the other one that I reported on last week, it's Zcash right here. So Zcash was down over 50% last week when it was realized that there was a bug in the code. And for the last four years, somebody could have, as I told you, could have minted unlimited tokens. And there's no way to tell if they did or if they did not. Once again, the market can't agree. Is this a good thing that we're going to patch it? Or is it a bad thing that this was exploited in the first place? What should the price of Zcash be? Are we going to get proof that there will be billions of tokens in tokens that have been minted that we didn't know about? Or are they going to patch this exploit? Unfortunately, crypto can be a clown show some of the time. So listen, at the end of the day, I think we all agree that it's fun to cover the news. It's fun to talk about what might be moving markets on a daily basis. But when you zoom out, almost all of this will be noise, right? I mean, crypto and DeFi and these projects eventually will have hardened security and these issues will slowly resolve. And we're going to get answers on what's happening with strategy and sailor and certainly inflation and the macro for months and years to come. So it's hard to count on a single CPI print tomorrow to determine what's going to happen in the long term. That's all I got for you today. I'll be back tomorrow. Peace.