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GM. This is Milk Road, the crypto newsletter that's as crisp as a chilled 7-Up on a hot day.
Here’s what we got for you today:
- ✍️ Global liquidity is picking up
- ✍️ $ETH ETF flows one week in
- 🎙️ The Milk Road Show: Should You Sell $ETH and Buy $SOL? w/ Lark Davis
- 🍪 DraftKings has decided to shut down its NFT business
Prices as of 9:30AM ET. Click here for our Fear & Greed Index
GLOBAL LIQUIDITY IS PICKING UP 🌊
Hey macro munchers! Even with the FED holding interest rates steady, we've got thrilling news: global liquidity is still soaring. 📈
Last week, global liquidity jumped up by a whopping $1.11 trillion, hitting an all-time high of $172.79 trillion.
Why care about this massive $172T liquidity pool? More money means cheaper loans and mortgages, putting extra cash into businesses and your pockets. 🤑
This fuels economic growth and supercharges the market! Remember our past Milk Road PRO report? We believe global liquidity drives crypto markets more than the Bitcoin halving (though that’s cool too). 👍
Knowing global liquidity’s status helps predict crypto market direction… and right now, it’s pointing up! 🚀
But will this trend continue?
Zooming out
Looking at the last 15 years, the trend is clear. There's plenty of room left in the current liquidity cycle.
The annual growth rate in global liquidity is up 3%, showing steady long-term growth.
And what's really exciting is the 3-month growth rate at 8%, hinting at a significant increase in liquidity in the coming months.
Rising liquidity levels are like a high tide that lifts all boats, especially risk assets like crypto. 🌊
Check out this chart showing the correlation between Bitcoin and global liquidity:
When global liquidity rises, Bitcoin tends to follow (and sometimes even overshoot it 🌠). The same happens on the way down.
In Bitcoin’s early days, even a small liquidity injection caused massive price swings.
While the market has stabilized somewhat since then, liquidity changes still lead to significant price swings:
- Since 2022, global liquidity has moved from $158T to $172T, a 8.86% increase.
- During the same period, Bitcoin surged from $16k to $66k, a 312.5% increase.
The correlation between these movements is becoming increasingly evident! 🥛 Milk Road take: At some point, global liquidity will peak and reverse. 🎢
The key is to be aware of this and not get caught holding your high-risk assets when the tide turns.
Liquidity is a crucial indicator to keep an eye on, helping you avoid riding your investments all the way down into the next bear market.
That’s why every Tuesday as part of our “Where are we in the cycle indicators” we dive into global liquidity, plus 4 other metrics so you can see when the cycle top is approaching.
This is a “PRO only” feature though so if you want the inside scoop to stay ahead of the game, join here.
Stay liquid, stay savvy, and keep those portfolios pumping! 🚀
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ETH ETF FLOWS ONE WEEK IN 👀
We had the almighty ETH ETF go live last Tuesday, so we figured it's a good time to check in on our 7 day old baby…
And it looks like we finally have more milk going in than doo doo coming out! (since day 1) 💩
Checks Math Yup, yesterday, we saw net inflows of $33.7M across the board.
Not too shabby, right?
AND here’s the kicker: Even though Grayscale’s $ETHE ETF still experienced a big outflow of over $120M yesterday, their selling spree has slowed down. Now let’s take a look at this spicy chart comparing asset loss since conversion for GBTC and ETHE.
Both funds have seen significant declines, but ETHE has been on a steeper slide.
SO, how long could the ETHE outflows last?
Well there's roughly 83% left, giving it about 33% to go until it tapers off like GBTC did at 50% (as seen in the conversion comparison above). That 33% is 1M $ETH, which is currently worth $3.3B in USD and given average daily outflows of $307M it would take roughly 11 more days to hit the 50% mark.
Keep in mind, that's just crunching straight numbers. 🔢
How it actually plays out will vary and some say it may take a few weeks to get past all the $ETHE outflows.
Now, all these ETF outflows in the first week and lack of price action on $ETH itself might have you asking is the juice worth the squeeze? 🍋 Well if you’re feeling that and wondering if $SOL may be the better play, we have just the podcast episode for you! Tune into today’s episode of The Milk Road Show where we explore these 3 burning questions with Lark Davis:
- Has the $ETH ETF been a failure?
- Is Solana the new Ethereum?
- What are his price targets for $ETH & $SOL?
YouTube | Spotify | Apple Podcasts
BITE-SIZED COOKIES FOR THE ROAD 🍪
Arbitrum is expanding its Orbit tech stack to networks beyond Ethereum, following a governance proposal with 83% support from holders. The expansion aims to accommodate requests from developers wanting to deploy Orbit on chains like Bitcoin, BNB Chain, and Cosmos, potentially increasing revenue for the Arbitrum ecosystem.
Cameron Winklevoss criticized Kamala Harris' crypto 'reset' as empty promises and called for the removal of SEC Chair Gary Gensler. Despite Harris' pivot on crypto, analysts believe it is unlikely to significantly influence voters.
Mt. Gox moved over $2B worth of Bitcoin to a new address, part of its $9B payout process to creditors. The wallets associated with Mt. Gox still hold about $5.29B worth of Bitcoin.
DraftKings has decided to shut down its NFT business due to ongoing legal issues, including a class action lawsuit alleging their NFTs are unregistered securities. The company will offer buyouts to Reignmakers players, allowing collectors to still access and transfer their NFTs.
Roxom, the first Bitcoin-native stock exchange, has launched with $4.3 million in funding led by Draper Associates. Roxom aims to revolutionize global financial markets by enabling trading of stocks, commodities, and futures in Bitcoin.
Wanna team up with the Milk Man? We currently have 2 positions open – check ‘em out and apply here!
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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.
