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GM. This is Milk Road, your friend in crypto.

(Like real friend. The kind that will make jokes about their own past experiences to soften bad news…it’ll make sense once you read the first article).

Here’s what we got for you today:

WHY DID FINANCIAL MARKETS JUST TANK? 📉

If you’ve ever randomly fainted, you’ll know it’s a weird experience.

One minute you’re just standing there minding your own business, the next minute you’re waking up on the ground with your mom asking if you’re ok. 

…and your uncle Terry in the background, telling your dad: “this kid needs to drink some concrete and harden the hell up”.

(No? Just us then. Cool. Moving on…)

Point is: if you haven’t been following the news around rate cuts over the last 24hrs or so, you might have missed the financial markets having their own version of a fainting spell.

Yesterday morning, everything seemed fine. The sun was up, Bitcoin was up around $104k, life was good…

Then BAM! Fed Chair Jerome Powell opened his big mouth, and…

Followed by the S&P 500 falling off a cliff…

And the US dollar strengthening (giving investors less incentive to move into risk assets, like crypto)...

…so what gives? We got the rate cut that we all expected. Why’s everyone selling?

Well, when J-Powell got-to-yapping yesterday – it wasn’t just to announce a 0.25% rate cut.

He also announced the Fed had revised their plan of 3 rate cuts in 2025, down to 2 – and that their new targeted inflation rate would be 2.5% instead of 2.1%

Which means loans/credit repayments will stay higher than previously expected in 2025 → encouraging folks to spend less, in an attempt to keep inflation down.

(And by raising their target inflation rate up to 2.5%, they’re subtly admitting they’re struggling to control it).

But here’s the thing – it’s all theatre. 

They might change their mind again in a few months (they often do).

The trick of it all is: simply by saying they’re making fewer rate cuts next year, they can get people selling assets, cooling down the market, and buying time to see if the data changes…

‘Cause everyone was already expecting a pause on cuts in January, and the Fed doesn’t meet in February – so by the time March’s meeting rolls around, the market could once again be ready for 3 cuts.

It’s like that time your uncle Terry threatened to give your Nintendo 64 to the neighbour’s kids if you didn’t stop fainting.

There was a good chance he wasn’t actually going to do it, but the fear kept you awake and alert.

(Alone again on this? Damn, ok.)

ANOTHER STAMP ON THE L2 PLAYBOOK: KRAKEN LAUNCHES ITS ‘INK’ L2 🐙

Q: What do these three things have in common?

A: They’re all cannibals. 

Apple cannibalized its iPod business when it launched the iPhone (👇). Netflix cannibalized its direct mail business when it launched its streaming service. Hannibal Lect—you get the point.

And now, three major centralized exchanges (CEXs), have begun the process of cannibalizing their existing businesses in order to (hopefully) replace them with bigger ones. 

The exchanges in question are Coinbase, OKX, and Kraken – and the new businesses are Ethereum L2s (Base, X Layer, and as of yesterday – Kraken’s ‘Ink’).

These L2s will pull users away from each company's centralized exchange over time, and onto a range of decentralized exchanges – which Coinbase, OKX, and Kraken have no control over.

…so why would they do it?

These guys make money through fees. More users = more fees.

But their centralized products need to meet a whole bunch of regulatory requirements – and each state/country has different regulations, meaning scaling globally can be tough.

By copy/pasting a bit of code, these companies can now create their own blockchains, where:

Meaning these things are globally accessible to builders/users from day one – and every time a transaction is made – guess who’s collecting the fees!

In the past 12 months, Base alone has generated close to $82M in revenue for Coinbase!

See why so many companies are jumping on the L2 train? 👇

And with every new company that joins, it puts another stamp of approval on the ‘L2 Playbook’, which reads:

“Move your business onchain → print cash.”

Hell yeah.

PRO “WHERE ARE WE IN THE CYCLE?” INDICATORS 🤔 

Still feeling a little on edge about the market’s latest pullback?

Time to check in with the market cycle.

Knowing where we are in the current cycle is crucial for capturing the best opportunities.

The goal is to spot the bull market peak before the inevitable bear market hits your bags hard.

Since timing the top perfectly is almost impossible, we use various indicators to give us a better shot at taking profits before it's too late.

Below are the 6 indicators we track, with a color-coded system to show how close they are to signalling the market peak:

🟢 Plenty of room to run 🏄

🟡 Getting closer to the top signal, but haven’t yet reached the mark ⚠️

🔴 We’ve hit the market top indicator 🚨

Every Thursday, we update these 6 indicators exclusively for PRO members.

Our advice? Don't wait for all of them to hit 🔴. It's better to take profits as they get closer to that point.

Let's dive in and see if we're anywhere near the top of this bull market. 👇

BITE-SIZED COOKIES FOR THE ROAD 🍪

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Hut 8, one of the largest Bitcoin miners, buys $100M of Bitcoin. They now holds over $1B in Bitcoin. The Bitcoin treasury strategy is going stronggg.

Ark Invest sells Coinbase shares again. Amid the broader market crash, $COIN faced some serious institutional sell pressure.

We’re on the hunt for a kickass social media manager to join our team. The best part? That’s just one of the 4 open roles waiting for you. Check out if the roles fit your vibe.

CoinStats is offering 50% off its annual subscription. We fully vouch for this portfolio management tool because we use it everyday. Spoiler: it’s fkn awesome.*

* This is sponsored 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.