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GM. This is Milk Road. When the market gets rough, we’re here to help you stay level headed.

(We’re like the crypto version of that “Calming Ocean Sounds” CD your mom used to play when you and your siblings were acting up.)

Here’s what we got for you today:

TODAY’S MARKET NUKE EXPLAINED 💣

1) What
2) Happened?

If you woke up this morning asking:

“Did I miss a big news event? What the hell caused this? Do you think I can still pull off a wallet chain in my mid thirties?”

The answers are: no, we’ll get into it, and you do you (but probably not).

Everything we’re seeing from today’s market puke appears to be a case of “weakening markets and growing fears causing mass liquidations (across multiple tokens)”.

Sounds kinda complex (and it is) – but we’re going to walk you through each step of the process in simple terms and take you from “huh?” to “Oh, I get it!”

Sound good? Let’s go!

Mass liquidations happen when a whole bunch of leverage builds up at certain price points.

Which is just a fancy way of saying “a whole bunch of people have taken out loans which they’ll be forced to pay back if prices dip to a certain level”.

And how do they pay them back? By selling their remaining crypto.

Which often causes the prices to drop even lower…which can then trigger even more liquidations…and so on – until prices level out, and people start buying back in.

(Helping to reverse the momentum.)

So here’s an over simplified version of how it likely went down…

👉 Markets have been weakening over the past few days (crypto & stocks)…

👉 Investors decided to start selling…

👉 This selling pressure helped push prices down...

👉 Liquidation levels were then hit…

👉 Leveraged traders were forced to sell their crypto to pay back their loans…

For example: here's a leverage trader from our PRO discord – thankfully, he has yet to be liquidated, but is getting close to having to sell some assets and add to his collateral.

👉 The more liquidation levels are hit, the more selling pressure we get…

👉 The more the price dips, until all of the local liquidation points been run through…

Here’s a chart showing you how all of that works… 

The yellow lines represent price points that will cause anywhere between $100M-$200M worth of selling to occur, so loans can be paid back (and this is just on Binance alone). 👇

It’s rough! But here’s the thing…

This is all par for the course in crypto – hell, the options markets have been telling us to expect a drop to $75k or lower since December (which we covered here, two months back).

Point is: unless we’re close to the cycle top (which, as Kyle explained in this video last week, we are still far from it) – drops like this are not something that we need to be worried about.

At worst, it’s a “grit your teeth and take it” kinda situation.

At best, it’s a “holy hell, this is a buying opportunity!” type of situation.

Remember: the moment you switch your thinking from “red charts = sell!” to “red charts = buy!” – investing becomes a whooole lot easier!

2025 = A TEST IN ‘TUNING OUT THE NOISE’

You know that scene in Old School, where Vince Vaughn’s character says “Ear Muffs” every time he’s about to swear, to signal to his kid to cover his ears?

Yeah. Well. We’re stealing that from him.

There’s going to be a whooole lot of noisy news headlines this year that you’re going to want to engage in – but are actually better left ignored.

We’ll still fill you in on what’s happening, so you’re up to date – but we’ll tag the story with ‘ear muffs’ to let you know that:

“Yes, this is what everyone is talking about right now, but you shouldn’t be re-shuffling your portfolio because of it.”

Let’s retroactively tag some of our stories as an example:

Now, on the flip side, here’s the kind of news that you want to tally up, and recognize as a larger (in this case, positive) trend:

The SEC has now dropped its enforcement cases against:

The message to absorb here: 

“It is now safe to build onchain in the US – time to let innovation flourish baaaby!”

Here’s to tuning out the noise and soaking up the alpha in 2025. 🫡

MILK ROAD PRO PORTFOLIO UPDATES 📊

We use fundamental value to guide our investments, and boy can it be powerful!

While our PRO Portfolio isn’t immune to market dumps like the one we’re experiencing — one of our tokens is still up 60% today (today, of all days!)

Wanna find out which one it is? Go PRO and keep scrolling to find out. 👇

Disclosure: We are not a day trading portfolio so don’t expect a high volume of trades. Read our “how to build a crypto portfolio in 2024” report to learn more about our portfolio strategy.

Portfolio performance 📉

The Milk Road PRO Portfolio saw a significant decrease over the past 7 days. Our portfolio value is at $88.4K, down 13.95% since last week.

Ouch, that one stings! Our portfolio just took a 14% hit.

And to make things worse, we just witnessed one of the biggest crypto hacks ever—$1.4 billion stolen from Bybit, the well-known Asian exchange favored by traders. 

Last week, we talked about staying patient while waiting for liquidity to return. Well, after this, that advice feels even more spot-on.

Portfolio changes 👀

BITE-SIZED COOKIES FOR THE ROAD 🍪

We’ve partnered up with NordVPN. Buy any 2-year NordVPN plan, get a 72% discount and an additional 6 months of free VPN. If you ask me, this is actually a crazy deal.**

CZ predicted today’s pullback 4 years ago. Anyone else starting to feel like we’re living in a simulation?

$USDC and $EURC get the regulatory green light in Dubai. Financial institutions operating in Dubai can now integrate $USDC and $EURC into digital asset services.

$956M leave US-listed spot Bitcoin ETFs. So far, February 2025 has been the worst month for $BTC ETF outflows since the category launched. Ouch!

Lido + Morpho = Sensible. If staking on Lido or lending on Morpho sounds too complicated, Sensible does it for you.*

*This is sponsored content.
**This is partner content.

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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.