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Today’s edition is brought to you by Osprey BNB Chain Trust ($OBNB) – the first tradable ticker for a security providing exposure to $BNB on the US stock market! |
👉 Learn more about $OBNB here! |
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GM. This is Milk Road, the newsletter that’s easier to read than the top line of an optometrist’s eye chart! |
Here’s what we got for you today: |
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THE BIGGEST DAY IN CRYPTO HISTORY 🥲 |
If you read yesterday’s edition, you’ll know that any good news surrounding crypto is being dampened by market conditions… |
But don’t let that fool you: |
Yesterday may just be the BIGGEST day in crypto history ever! |
Last night, Trump signed an executive order to do the following: |
Move any Bitcoin seized by the US government (past, present, or future) into a Strategic Bitcoin Reserve Stop any further selling of $BTC on the US government’s behalf Allow the US Treasury to create strategies to buy more $BTC (as long as it doesn’t cost the taxpayer) Create a general (non-Bitcoin) crypto stockpile with any existing/future seized crypto assets (note: the Treasury won’t be able to buy more of these tokens)
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TL;DR: We got a Bitcoin Reserve and a general Crypto Reserve, at no cost to the taxpayer. |
Did the market care? No. Quite the opposite (ear muffs – this is still monumental). |
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The beauty of all this is, it makes it hard for either side (pro-crypto / anti-crypto) to complain. Crypto people got what they wanted, and it ain’t costing the anti-crypto folk a dime. ✅ |
(Don’t get us wrong, both sides are going to complain – it’s just going to be harder for them.) |
Now, there are two things we want to dig into here: |
How will the treasury acquire more Bitcoin at zero cost to the taxpayer? And the massive leap we just took in the game theory of global $BTC adoption. |
1/ How will the US Treasury be able to make ‘budget-neutral’ $BTC purchases? |
Short answer: if you can’t use taxpayer money, just use your own. |
Long answer: the Treasury department can make budget-neutral Bitcoin purchases in a bunch of different ways, e.g: |
Revalue their gold reserves → use any increase in value as collateral to take out new loans → buy $BTC. Reduce the Federal Reserve’s surplus (i.e. lower the amount of spare cash they’re allowed to have) → forcing them to spend more → funnel some of that spend into $BTC. Sell Bitcoin bonds → take a chunk of the money earned from selling these bonds and put it into $BTC → allocate the rest to funding government operations.
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The catch: these solutions (and most of the other options, outlined by Van Eck’s Matthew Siegel below) would require congressional approval – so they’re not sure-fire options. |
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2/ The $BTC game theory just kicked into full gear! |
The Bitcoin game theory = if the US is holding it, other countries will want to follow (so they don’t get left behind). 👇 |
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Brazil approved a $BTC reserve yesterday… The United States announced the same thing a few hours later… And now it’s rumored China is discussing a Bitcoin Strategic Reserve…
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They all add further pressure to those on the sidelines to start buying Bitcoin – but the US has always been the 200 pound anvil that would break the camel’s back. |
And last night, that anvil was dropped. |
(Our thoughts and prayers are with the camel and its family at this time.) |
P.S. Want more insights on: |
The US’ Bitcoin Strategic Reserve (BSR) Which states may soon launch their own BSRs Why the market is reacting poorly to all of this bullish news
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We just sat down with Pantera Capital’s Mason Nystrom to talk all that and more! |
Click below to watch it now. 👇 |
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YouTube | Spotify | Apple Podcasts |
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COTD: PREDICTING THE MARKET’S NEXT LEG UP 📊 |
Yesterday, we mentioned that the DXY (which tracks the strength of the US Dollar) recently saw a sharp decline. |
…and it has only continued to fall since then. |
Hell, it’s been so consistent that Kyle has created a running thread that tracks each move down (yeah, he needs a hobby). |
Today, we want to zoom out and see what we can learn from the historical patterns. |
(‘Cause ICYMI: a weaker dollar can often result in stronger crypto prices.) |
First, cast your eyes upon this chart: |
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The key points here: |
This kind of decline in the DXY has only happened 3 other times in the last 12 years After the trailing 3 declines, we’ve seen anywhere from 5-87x returns in $BTC Changes in the DXY can take months to reflect in the $BTC price
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Second, bundle all of that together, and read the message being relayed: |
It will take time, and you shouldn’t be expecting 2015-era returns of 87x (they decrease over time, as $BTC becomes a larger and larger asset) – but if history is anything to go by, we should be due to see our next leg up in the coming months. |
BOOM! |
Bitcoin Reserve announced, forward-looking indicators pointing up… |
If that’s not a great way to enter the weekend, I don’t know what is! |
Milk Man out. 🫡 |
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BITE-SIZED COOKIES FOR THE ROAD 🍪 |
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SBF is back? He’s done a 42-minute interview from behind bars! If he’s open to doing more interviews, we should get him on the Milk Road Show. |
Retail is getting fked. Since November 2024, retail holdings have only been on a downtrend. Yikes. |
Jito is considering buybacks. Aave proposed it earlier this week and looks like other companies are following suit. |
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MILKY MEMES 🤣 |
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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research. |
