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GM. This is Milk Road, the crypto newsletter that’s as uplifting as a perfectly-timed compliment from a stranger.
Here’s what we got for you today:
- ✍️ What to watch for this week
- ✍️ Investor nightmare: You were right, but didn’t profit
- 🎂 $ETH’s birthday and ETF launch
- 🎙️ The Milk Road Show: How onchain analysis gives investors an edge with Arkham Intelligence CEO, Miguel Morel
- 🍪 China pulls out a surprise interest rate cut
Prices as of 9:30AM ET. Click here for our Fear & Greed Index
WHAT TO WATCH FOR THIS WEEK 🧐
Welcome to another exciting week in crypto! Let’s see what key events and data trends can shape the market dynamics this week.
We have a BIG WEEK AHEAD ladies and gentlemen, the Milk Man’s been frothing at the mouth to spill the beans.
1/ Key macro events 🔢
The Federal Reserve and economic data releases are set to play a big role this week. 📆 Here's the lineup:
- Tuesday: Existing Home Sales data (How many old houses are we buying, folks?)
- Wednesday: New Home Sales data (Fresh digs for anyone?)
- Thursday: Q2 2024 US GDP data (Are we growing or slowing?)
- Friday: June PCE Inflation data
Everyone's focused on the PCE (Personal Consumption Expenditures) inflation data this week, the Fed's go-to gauge for inflation.
It tracks the prices of everything we’re buying, from light bulbs to Netflix subscriptions, giving a clear picture of how much we’re shelling out.
The Fed loves the PCE because it’s super thorough and adjusts for consumers' ever-changing tastes. 💡
These events are crucial for understanding the economy and the Fed's next moves. Keep an eye out for market movement based on these announcements. Spoiler: Markets hate surprises almost as much as we hate bear markets. 🐻
2/ More Q2 earnings 💲
It's that time of the quarter when corporate giants crack open their books and reveal their financial goodies. About 20% of S&P 500 companies are dropping their Q2 earnings this week, including some heavy hitters. 🥊
Think of it as the crypto equivalent of opening a mystery box—will we get some shiny reports or some piles of junk? 🏆
Key reports:
- Monday: Verizon, Truist, SAP
- Tuesday: Spotify, Tesla, Alphabet
- Wednesday: AT&T, Ford, IBM
- Thursday: American Airlines, Hasbro, Honeywell
- Friday: 3M, Charter, T. Rowe Price
Earnings reports from these giants can impact market sentiment in big ways.
Positive earnings might boost investor confidence, while misses could lead to sell-offs. Any surprises could create market buzz or FUD. 🙃
3/ Crypto election updates 🇺🇲
President Biden just dropped out of the race, leaving the 2024 presidential race in a bit of a pickle.
This news sent shockwaves through the political landscape and even the crypto world felt the tremors.
What does this mean for crypto?
Some experts think a new democratic candidate could bring increased regulatory uncertainty, while others believe it might lead to fresh perspectives on crypto regulation. For now, crypto traders are left scratching their heads, trying to make sense of it all. Keep an eye out for how things unfold this week.
4/ Bitcoin 2024 🟠
Look out for the biggest conference in crypto, Bitcoin 2024 is taking place this week in Nashville, from July 25th to 27th. The speaker lineup is headlined by Donald Trump and includes heavyweights like Michael Saylor, Cathie Wood, Vivek Ramaswamy, and Russell Brand.
Rumor has it that former President Donald Trump might make a significant announcement regarding Bitcoin's role in the U.S. economy (Hint: Strategic reserve asset).
No official confirmation yet, so we'll have to wait and see if this rumor holds any water. The Milk Man’s squad will be there to keep you updated via twitter!
5/ Token unlocks 🔓
This week a bunch of tokens are unlocking, totaling $128M worth of digital dollars,
Schedule:
- Altlayer:$104.6M worth of ALT tokens unlocking on July 25th (42.1% of circulating supply)
- Yield Guild Games:$7.19M worth of YGG tokens unlocking on July 27th (3.7% of circulating supply)
- Ethena:$6.90M worth of ENA tokens unlocking on July 28th (0.9% of circulating supply)
Why does this matter? Glad you asked!
As you’ll see later on in today’s edition, sometimes these unlocks can create an investor’s worst nightmare….
NO CHAINS LEFT BEHIND
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INVESTOR'S NIGHTMARE: YOU'RE RIGHT, BUT YOU DON'T MAKE MONEY! 😨
Imagine this: It's July 2021, and you snag $LDO, the top liquid staking protocol, at a market cap of $55M. Fast forward to July 2024, and the market cap hits $1.7B—a 30x jump. You nailed it! Time to celebrate. 🎉
You open your app, expecting massive gains…
But then, the shocker: Token price is flat.
The token decreased from around $1.96 to just under $1.94.
How can the market cap soar while the token price stays flat?
The Milk Man has seen this before and is here to help. 💁
The reason is that new tokens are making their way onto the market, driving up the market cap but often creating more sell pressure and driving down the price.
Here’s some other examples of market caps and token prices that seem to be on different planets.
1/ Immutable X
Take $IMX, the token of Immutable X, a top Ethereum L2 for web3 gaming as another example.
From October 2022 to March 2024, the market cap jumped from $400k to nearly $5B at its peak—a stunning 12.5x return.
But the token price only moved from $0.65 to just over $3.64, giving a disappointing 5.6x return.
2/ Solana
Yup, not even $SOL is immune to token dilution. But hey, at least it’s not as bad as the previous examples!
Since September 2022, its market cap has skyrocketed from under $11B to around $90B by March 2024—a healthy 8x.
But here’s the kicker: While Solana's market cap is hitting all-time highs, the token price didn’t keep pace.
$SOL's price went from about $30 to around $202, a smaller 6.7x return.
🥛Milk Road Take: How can you ensure you don’t get fooled like this??
When new tokens are issued, the total number of tokens increases. Without matching demand, it’s likely that the token’s value can drop, due to those new tokens being sold.. 📉
The project’s market cap will grow, but the price may still head downwards (like the US dollar during printing szn).
How to position for sweet dreams instead of nightmares? Be aware of these 2 things:
- Token Inflation: Some protocols have an uncapped supply and keep minting (issuing) new tokens on the regular. Not always bad, but without a burn mechanism or enough demand to absorb supply, prices will likely drop.
- Low Float, High FDV: Projects often lock away most tokens, releasing them as grants, airdrops, or for early investors. If demand isn’t there when these tokens hit the market, prices tend to fall.
Sometimes, good projects can have terrible tokenomics, making what looks like a good investment a bad one.
ETHEREUM’S BIRTHDAY RIGHT BEFORE ETF LAUNCH 🎂
Happy Birthday, $ETH! Today marks the 10th anniversary of Ethereum’s ICO (initial coin offering), giving birth to $ETH the asset. 🥳 Here’s a stellar tweet giving $ETH a well deserved recap:
And the party’s just getting started! 🪩
Tomorrow, $ETH spot ETFs are set to begin trading in the US, a major milestone that’s set to bring even more mainstream attention to the second-largest crypto by market cap.
This marks the start of a new journey into the institutional spotlight for Ethereum, which is now widely recognized as a digital commodity.
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China cuts interest rates by 0.25% to boost the economy. Guess even economies need a little pick-me-up sometimes, eyes on you Jerome Powell!
Kraken Custody has launched its institutional services in the UK and Australia, 1st international move since its US debut in March. The expansion aims to offer secure storage and management solutions for digital assets. Kraken plans to extend its reach to other markets, including the EU and Switzerland. — DL News
OKX launches game as the Telegram mini-app craze continues. OKX Racer lets users predict Bitcoin’s short-term price movements in five-second intervals. Players earn points for correct guesses, which can be used for in-game upgrades and referral rewards.
Metaplanet boosted its Bitcoin holdings to 1 billion yen, driving a 19% surge in its stock price. The firm now holds 245.992 BTC, solidifying its strategy to follow in the footsteps of MicroStrategy. The company completed this purchase by acquiring an additional 20.38 BTC.
Trading on Polymarket surged past $300 million as the U.S. presidential election heats up. The market for the Democratic nominee hit $200 million, and another $10 million is wagered on the vice presidential pick. Biden's exit has driven unprecedented activity.
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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.
