Bitcoin rebounds after sell-off, and the White House gets crypto broker rules

Bitcoin's big rebound after the midterms was entirely erased in the face of a massive tech and market route across the world. What is going on? We're going to unpack that and everything else happening in crypto markets right now in the Daily Wolf. 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 yesterday

was one of the worst days in recent memory for markets across the world. Of course, markets bounced this morning on good job numbers which we can get into and once all of that leverage was liquidated. Asian markets still were suffering today, uh hitting circuit breakers left and right as is tradition. So,

this reminds us once again. I said this on my YouTube show this morning as well. We do shows every single day. We talk about what the price is. We talk about where markets are likely going. But there's a theme we say that there's two types of people in markets, those who are humble and those who will be humbled. And this is one of those days where you will be humbled. You know, you do a story one day about how shorts were liquidated and the market is bouncing and then the next day you come back and all those longs are liquidated and the bounce is absolutely over. So let's unpack a bit of what happened.

Bitcoin erases post-election gains as Wall Street sell off triggers over 1 billion in crypto liquidations. The sell off triggered a wave of forced liquidations across crypto derivatives markets as total liquidations over the past 24 hours reached 1.09 billion affecting 211,000 traders. First of all, you can use a stop loss and not get liquidated.

I I still don't understand liquidation is not a stop loss. You lose more if you're liquidated than even setting a stop loss slightly above your liquidation price. By the way, those numbers as of 5:00 a.m. today were up to 1.26 billion dollars. Of course, 1.12 billion of that total was in longs. US spot Bitcoin ETFs recorded 430.2 million in net outflows Thursday. No surprise. Uh we know that they go up and down. Fidelity was about 200 million of that, Black Rock's Ibit was about 100

million of that. So Monday through Thursday we had net redemptions of 869.8 million. But let's talk about what actually happened yesterday and why. So I'll give you some numbers, but if you're wondering apparently, according to the media and the narrative of why we saw this massive tech sell off yesterday, it started with this. single tweet

by a nearly irrelevant Congress person. All Congress people are generally irrelevant. There's too many of them.

Top of the Democratic agenda on day one

needs to be a pause on advanced AI development, regulation of this out of control industry and a ban on artificial super intelligence. As you can see, 18.5 million views on that tweet, a bunch of other Democratic Congress people jumped in and said, yeah, terrific, you're right, let's ban it.

Right? First of all,

nobody's banning AI. It's absurd. It's like saying banning the iPhone or banning the internet or banning, you know, voiceover IP. You can't ban a technology that's already out in the wild that multiple countries are working on and if we did ban AI in the United States, meaning just our models for United States citizens or banning data centers and the build out, China and other countries will just dominate AI, which will be the dominant technology into the future and will be the end of the United States dominance

as we know it. So it's not happening. First of all. Also notable that politicians make wild promises all the time, especially right after they've been elected and they're feeling particularly empowered and those promises never come true.

Remember, for any major legislation banning AI, it would have to get past the President of the United States desk. Uh last I checked that's Donald Trump. Right? So yes, the Democrats could maybe get some tailwinds and pass some AI legislation through the house and then maybe it would run into the Senate and we would see if they could get the 60 votes, but it ain't getting past the president's desk. So this is really a non issue. They can slow things down, they can make things difficult, but an outright ban not

going to happen. But after this tweet, right, markets were only slightly down in the morning, but after this tweet started to gain traction,

what we saw yesterday was one of the worst sell-offs in a long time. The Nasdaq was down 5.5%, which is its worst day since the tariff scare in 2025 in April, closed approximately 12% below its October record. So over 10% down now since the highs. S&P dropped 4.4% a day, also its worst session since April 2025. The Dow was down 1833 points or 3.4%.

All 11 S&P 500 sectors finished lower. This was all led of course by semiconductors. The Philadelphia semiconductor index plunged 12%. It's second biggest decline quite literally ever. Nvidia down 9%. Micron and and Marvel each down approximately 7%. I think Sandisk was down way more.

Right? So investors sold AI related stocks amid concerns about slower data center construction and returns on infrastructure spending. So the market was already spooked about AI. You get a quick tweet and you get people saying, oh no, the Democrats are in power and you get this massive sell-off. Of course, we were at historic highs of leverage. Tale as old as time, right? Uh leverage ETF buying in October was the largest we'd ever seen in the stock market.

And so all that leverage was liquidated. and then of course, this morning you get job numbers which are quote-unquote favorable. October payrolls rose 165,000 versus an estimate of 59. unemployment fell to 4.1% from 4.2%. Average hourly earnings rose 0.4% in October and 3.1% year-over-year exceeding forecast.

So, of course, that means the CME Fed Watch put December quarter point hike odds near 77% after the release release up from roughly 67 to 70%. So because we have strong job numbers, that means that the Fed can hike, which maybe is bad for markets. I don't know.

But I don't even check markets on an hourly basis anymore, but they had bounced pretty big this morning. Now for me, the story about Bitcoin, which is what you're obviously here for, is that it's still trading at prices where it had already bottomed last week. It's still trading above for now or right on the 50 MA on the weekly, which is obvious obviously viewed as a bull bear line for the market. But it's important to me that Bitcoin just a couple days ago before the election was at 75, 76, you know, give or give or take a thousand here and there. It had that massive

move on the short squeeze and now it's back to those prices while the rest of markets are actually on fire and performing far worse. So you could really look at Bitcoin if you look at the two last two weeks and say it's pretty much trading sideways in the mid 70s or so.

while everything else is starting to approach bare market territory. So I still would make the argument, of course, I'm a Bitcoin guy, but I'd still make the argument that it looks like Bitcoin is outperforming. So, let's talk about another Bitcoin and government related story that's being reported right now.

Trump Media moves 342 million in Bitcoin to crypto.com blockchain data show. So, of course, you go on X and you see Trump Media sold all their Bitcoin. Didn't happen. May have happened, I can say, but we cannot confirm that it happened. So we do know that the wallets tied to the Trump Media moved 4,259 Bitcoin to crypto.com.

These transfers came from wallets labeled as collateral for 2028 convertible no notes and moved in two batches. So Trump Media previously described similar crypto.com transfers as trading or custody management rather than sales. So moving to an exchange does not necessarily mean that they sold. So I want to clarify that because I'm seeing reports across media that they have sold all of their

Bitcoin. So, keep your brain together, keep your wits about you, don't believe everything you read. There are a lot of reasons that a company would move their Bitcoin

and putting it into different custody could be one of them. We will eventually find out whether they sold or not. We do know that American Bitcoin, which is the Trump affiliated miner actually added Bitcoin. So, would be one hand doing one thing while the other is doing another. The next story we have right here. White House begins review of economically significant SEC crypto broker dealer draft. The White House regulatory office log the SEC draft on November 3rd, but its text is not public, so what it would change for brokerage holding crypto is not

yet known.

But the story here once again is that the SEC, CFTC, the regulators, even with a little lack of legislative clarity, continue to push forward, write rules and send them off to the White House to get them into action. So this is about what crypto broker dealers would be able to do. The package addresses financial responsibility, record keeping and recording for reporting for crypto assets. So broker, net capital, customer protection requirements, how these broker dealers would be able to custody assets on behalf

of their customers specifically in crypto. So we don't have a legal deadline here, but it's interesting that the OIRA review record marks this proposal as economically significant, meaning that it is actually important and something that needs to be seriously considered and reviewed. So we don't know what the changes will be uh yet, but we know that the SEC has been favorable and these are likely to be rules that the crypto industry would like

and that the broker dealers likely would be able to comply with. So while Washington is reviewing the financial plumbing here, Samsung's putting a stable coin purchase button in consumer's hands. Pretty big story here.

Samsung wallet launches USDC accounts on Solana for US Galaxy users. Samsung's wallets stable coin account lets eligible US Galaxy users buy, hold, send and receive USDC on Solana via the app. So this was actually announced by Stripe

on November 5th because it's their crypto on-ramp powers, uh, powers purchases in Samsung wallet stable coin account. So it's powered by Stripe going through Samsung wallet. But this is huge because Samsung says that 82 million US Galaxy devices

are compatible with this stable coin feature. That does not mean 82 million people are going to use this, but it means 82 million people can. It's right there in the wallet that they already have their phone, right next to their credit cards and everything that they're already using to make payments. It says Coinbase serves as sub-custodian through Coinbase Prime, and Samsung's announced functionality includes transfers to compatible wallets and eligible bank accounts

in more than 60 countries. This is a indication of what we're likely to see in the future, which is that stable coins are going to be integrated into every single payment platform on planet Earth because they're faster, they're cheaper and they are more efficient, right? Does this mean that like Solana's going to go up? Obviously, it does not necessarily mean that.

But it does mean that stable coins are going to take over and as things become tokenized and as USDC and USDT and others are added to stable coin and wallets on phones like this,

that's a preview of what's going to happen with tokenized stocks and tokenized assets and what you're going to be able to do when all of these things are on the same blockchain rails. Really, really uh important uh update there and I'm here for it. Next story is a quick update from Zcash. Zcash's landmark NU7 Noven upgrade. it's not pronounced that way.

I'm so weird. Upgrade goes live, speeding up private payments. Noven, NU7 cuts the target time between blocks to 25 seconds, reduces the work wallets must do to find private payments and sets aside fees for future miners. This activated at block 3,543,405,

which was about 9:34 a.m. Eastern today. The block subsidies fell proportionally preserving the daily issue issuance rate, the 21 million Zcash cap supply remains unchanged. So this upgrade direct 60% of transaction fees into reserve for later reissuance.

Version four transactions are no longer valid making funds remaining in the legacy Sprout pool unspendable. Get your legacy funds out of the Sprout pool.

Things I didn't think I would be saying on mainstream television on Friday, November 6th. But listen, we're seeing blockchains upgraded. Zcash getting uh faster and easier is definitely good news for anybody seeking privacy.

So, once again, I am here for it. And on the last story of the day, we have yet another update about the Binance hack, which we're going to be talking about for a while. Here you go. Hackers paid $15 to drain 2.5 billion from Binance in one hit.

So as you know, hackers stole $6.3 billion from Binance and used a feature to take 40% of the stolen cryptocurrency in one transaction reducing their chances of being caught that was $15. This is what they're reporting. $15 network fees to install an Ethereum wallet delegation. Block Aid estimates that single permission approximately enabled approximately 2.5 billion to be drained in one subsequent transaction. The mechanism used Ethereum EIP-7702 wallet features, some real nerd stuff here.

EIP 772 lets a wallet authorize execution of another contract's code. So CoinDesk's transaction analysis found valid authorization signed by the affected Binance wallet. So, I mean, the TLDR here

is that a $15 basically upgrade or permission was enough to hack 2.5 billion dollars, which means maybe just maybe uh crypto security is not ready for prime time. To give you a preview, I'm talking to Nathan from Anchorage on my Sunday podcast which will come out on YouTube and you know, they're one of the biggest custodians on the planet, a crypto bank. We talked a lot about this and he really does believe that custody should be separated like it is in other markets.

We're going to see what the market does today, of course uh over the weekend and into Monday. Let's hope Bitcoin holds these levels and starts to push back up. We'll see what happens. That's all I got for you today. I'll see you on Monday. Peace.