GM, this is the Milk Road. The email that tells you what's going on in crypto every single day.
In Today’s edition:
- 😎 We spent $200k on an NFT
- 💰 A $22m bet goes down on Twitter
- 👩⚖️ A game changing Bitcoin bill
- 📊 Looking at the P/E ratios of top projects
WE BOUGHT A CRYPTOPUNK FOR $200K
Yesterday we covered the big news. the Bored Ape Yacht Club bought CryptoPunks.
I had a feeling this would cause the price of either Apes or Punks to go up.
So I texted Ben: Let’s buy a Punk or Ape.
Ben: agree
Me: which one? Punk or Ape?
Ben: hmm I like apes, but my gut says punk
A few clicks later, and the Milk Road purchased our first big NFT. A CryptoPunk.
Of course, the next day, Punks went down 5% and Apes are up 32%. We could have made over $50k of profit in 24hrs…
Oh well, as they say, the game is the game...
Live and learn, onto the next one!
A $22M BET ON LUNA GOES DOWN ON TWITTER
If you’re new around here, I’m bullish on LUNA and made a big bet on it (read why here).
One reason is I really like the founder, Do Kwon. He has an extreme irrational confidence and swag in everything he does.
Now, for what went down with Do yesterday...
It all started with a series of tweets from Sensei Algod talking shit about Luna:
"Luna is the Bitconnect of this bull run. Printing 20% apy out of their asses, once apy drops and demand goes down Luna will also spiral down having to bail out billions of UST" [Tweet]
And then he went looking for someone to bet against that Luna's price will be lower a year from now, than it is today. [Tweet]
90 minutes later and Do Kwon (the Luna founder) confirms that he's in, but he wants to go bigger and take 90% of Sensei Algod's money for the bet 🤣
From there, they hammered out the terms in real-time on Twitter and each sent $1M to Cobie - who will serve as the middleman here.
The final bet: If the price is over $88 (according to CoinGecko) on March 14, 2023, Do Kwon wins and if it's under, Sensei Algod wins.
And just when we thought it couldn’t get any better, another crypto whale (GCR aka Gigantic Rebirth) enters the chat to get in on the action and ups the ante.
Well, that escalated quickly.
What started as a $1M bet led to another bet with $10M on the line this time.
It's easy to say you're gonna make a big bet and never do it...so did they each actually put in the $$ they said they would??
The coolest part about this is because it’s on the blockchain, we can see the transactions
This is the wallet address holding all the funds: 0x4Cbe68d825d21cB4978F56815613eeD06Cf30152
Etherscan even tagged the wallet as the escrow address for the bet
- You can view the $1M transaction from Algod here
- You can view the $1M transaction from Do Kwon here
- You can view the $10M transaction from GCR here
- You can view the $10M match from Do Kwon here
A total of $22M in the pot locked and loaded.
The Milk Road's take:
Even though we are bullish and have invested 20% of the Milk Road portfolio on Luna it’s important to read and understand the counterarguments.
Why are people willing to bet $10m against Luna and UST, and why do they say it’s a ponzi waiting to crash?
Algod argues that UST maintains stability through a simple swap mechanism: 1 UST can be exchanged for 1 dollar’s worth of LUNA at any time.
So if UST becomes less valuable than $1.00, buyers can scoop it up and use the swap mechanism to sell it for $1.00, enabling them to make a profit. As buyers do this, demand for UST causes the price to go up again until it reaches $1 USD.
What Luna enthusiasts are expecting is that demand will infinitely keep exceeding supply, but the moment supply exceeds demand people will panic and start mass redeeming ust for Luna -> usdt.
Algod argues that when the Black Swan event happens or supply exceeds demand it will be a race to the bottom and it's only a matter of time.
While Algod may end up being right, we're still sticking with Luna and riding with Do Kwon 🌊!
P.S. I wonder how much yield Cobie (who is holding the $22m) is gonna make off the money…conservatively, let's say 20%? Then, just by holding the money in escrow and getting yield in a "safe' way, he’ll net $4.4m.
BOB IGER ENTERS THE METAVERSE
Bob Iger is famous for being a Masterclass personality.
JK 😂
He was the CEO of Disney for 15 years and led acquisitions of Pixar, Marvel, Lucasfilm, and 21st Century Fox.
So, yea, kinda a big deal.
And now he’s on the Board of Directors at Genies - a startup that’s making avatars for the metaverse that recently launched their own NFT marketplace.
BITCOIN PURCHASES UNDER $600 WON'T BE TAXED...MAYBE!
News just leaked about a new Bill being written that proposes all Bitcoin purchases under $600 would be tax free!
It's being worked on by the "Bitcoin Senator," Cynthia Lummis out of Wyoming.
This is a huuuuge deal because it could actually pave the way for Bitcoin to be used to make every day purchases....so we'll be watching closely.
STEPHEN COLBERT MAKES FUN OF NFTS
Ghandi once said: “First they ignore you. Then they laugh at you. Then they fight you. Then you win.”
We’re currently in the second stage - with Stephen Colbert piling on a 2-minute trailer for a new blockbuster heist about stealing NFTs..watch it here.
My personal favorite is this oldie, but goodie from Saturday Night Live last year. Just like Kim K, I can never get enough Pete Davidson.
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CHART OF THE DAY
One way that investors typically look at investments is based on the Prices/Earnings ratio.
In general, the lower the P/E ratio, the better. That essentially means the performance is already baked in, whereas a higher P/E ratio means that you’re expecting future growth.
For example, Apple trades at a 25x ratio.
Check out this chart of the P/E ratio from top projects over the past 30 days:
The Milk Road's take: Crypto is so early, we don’t have benchmarks for what “normal” trading multiples are yet. That will come over time, but it's still useful to look at these charts when making decisions on what you're gonna invest in
Alright, that's all we got for this fine Tuesday!
Shaan "Chocolate Milk" Puri and Ben "2% Milk" Levy
What'd you think of today's email?
