Today’s edition is brought to you by Venom - a new Layer-0 blockchain whose testnet just passed 1 million active wallets. Explore Venom now.
GM. This is Milk Road, we serve crypto news with zero calories and double the flavor.
Here’s what we got today:
- Milkbusters: Michael Burry’s new bet 💲
- VISA’s latest crypto experiment 👀
- The creator of Farmville launched a new web3 game 🍪
Prices as of 11 AM ET. Click here for our Fear & Greed Index
MILKBUSTERS: MICHAEL BURRY’S NEW BET 💲
We’re back with another edition of The Milkbusters - where we debunk common narratives and misconceptions in crypto.
Today, we’re gonna talk about… Michael Burry's new market bet.
Now in case you don’t know who Michael Burry is, he’s “The Big Short” guy. (and no - he isn’t big, or short)
He famously:
- Predicted the housing crash in 2007
- Heavily shorting the market before it crashed, and made millions
- Got his own movie (called The Big Short)
Some people think he’s a market oracle.
Other people think he’s like that guy who still brags about his high school touchdowns, 20 years later.
Well yesterday, all the fanboys and haters were talking about Burry’s new bet.
The Bet: Michael Burry is shorting the market (aka betting against it) and bought $1.6B in put options.
It was all over media headlines and sent investors into a frenzy.
Well, the Milk Man decided to do some research and had some interesting findings. Let’s dive in…
MYTH #1: Michael Burry bought $1.6B in put options.
OUR FINDINGS: False.
The $1.6B is the notional value of the shares associated with the put options. NOT the real market value.
Notional value = the total value of assets in a leveraged position. It’s more of a theoretical value.
Market value = the actual value of those assets right now on the market.
So although Burry did place a bet shorting the markets, it wasn’t a $1.6B bet. It was much much lower.
Side Note: Some are estimating Michael Burry paid $100K-$1M for the positions, while others are estimating it was $10M-$50M. Who knows for sure.
MYTH #2: Michael Burry just placed the bet.
OUR FINDINGS: False.
While most headlines reported this was 🚨 BREAKING NEWS 🚨, the reality is that these were Michael Burry’s holdings as of June 30th.
46 days ago. (Which in the investment world is like…)
The Truth: All of this info is based on the earnings report from Burry’s company, Scion Asset Management, from last quarter.
So it’s unclear whether Burry still holds those positions or has sold them off since.
MYTH #3: If Burry’s prediction is right and the stock market crashes, so will the crypto market.
OUR FINDINGS: False.
“If stocks pump, crypto jumps. If stocks bleed, so do we.”
This is a well-known nursery rhyme in crypto. And it’s been sung from market cycle to market cycle.
Well, times are changing. And right now, it looks like Bitcoin’s correlation with traditional assets (i.e. stock market, gold, and oil) is almost non-existent.
Bitcoin correlation with macro basically zero at the moment. We are on our own plane.
— Mando (@rektmando)2:00 PM • Aug 11, 2023
Milk Road Take: We aren’t Michael Burry fanboys or haters. We’re just curious and want to get to the cold, hard facts about what’s really going on.
To summarize:
- No, Michael Burry didn’t spend $1.6B shorting the market
- Those holdings are as of June 30th
- Bitcoin is currently decorrelated from traditional assets, so a stock market crash wouldn’t necessarily lead to a crypto crash
And remember Roaders, always do your own research.
**mic drop**
VENOM: BREAKING THE 1 MILLION MILESTONE
There’s a new revolution shaking crypto. And it’s all going down on a new blockchain that’s showing a lot of promise.
That’s right Roaders. Venom Blockchain now has 1 million wallets created.
The word on Twitter is that the Venom testnet is fast, smooth and has the best user experience.
And the numbers back it up. In just a couple of months there’s been:
- Over 420,000,000 transactions
- Over 49,000,000 smart contracts created
- And close to 10,000,000 NFTs minted
See what all the hype is about. Join the million wallets exploring Venom’s innovative blockchain today!
VISA’S NEW CRYPTO PROJECT 👀
Visa is the King of Payment Processing. It…
- Is used by 100M+ businesses in 200+ countries
- Processed 255B+ transactions last year
- Saw $14T in total volume (including payments and cash volume) last year
(In the great words of Drake: 🎵 it’s top 2, and it’s not 2.🎵)
Well, something you might not know is that Visa has been experimenting with crypto. A lot.
The latest experiment: paying Ethereum gas fees using a Visa card.
We're excited to share our experimental solution on Paying Onchain Gas Fees with a Visa Card At @Visa, we've been exploring ways to simplify blockchain transactions Imagine paying for gas fees as easily as buying coffee with your card! But how did we get here? 🧵👇
— Mustafa (@digitalmustafa)8:53 PM • Aug 10, 2023
Here’s everything you need to know:
- Visa’s solution uses Ethereum’s ERC-4337 standards and the “Paymaster” smart contract. (i.e. something that allows off-chain gas fee payments)
- The users trigger an Ethereum transaction through their wallets, which is then sent to the Paymaster
- The Paymaster calculates the gas fee and charges Visa through a service called Cybersource
- A digital signature is produced, attached to the wallet, and then sent to the blockchain
- The blockchain verifies the digital signature and the Paymaster settles the gas fee
- Visa’s crypto team successfully tested this out on the Ethereum Goerli testnet (aka a replica of the Ethereum mainnet that’s designed for testing purposes)
Why this matters: This is big for 2 reasons…
1/ This lets users pay gas fees off-chain with a Visa card and eliminates the need for users to hold ETH to pay for gas fees. (gamechanger)
2/ It shows that the largest payment processor in the world is experimenting with blockchain technology and building features to make crypto easier.
More tools to make crypto easy = better chances for mass adoption (and fewer calls from the fam whenever they run into crypto trouble)
It’s a win-win.
BITE-SIZED COOKIES 🍪
Onchain Summer kicked off with a bang. Coca-Cola®, Atari, OpenSea, and over 50 leading companies, artists, and creators are coming together for a multi-week on-chain celebration on Coinbase’s Base network.*
Zynga is launching a new web3 game called Sugartown. The creators of Farmville and Words With Friends are getting their first taste of crypto.
Immutable announced its opening up testing for its new Layer 2 blockchain, Immutable zkEVM. It’s a zero-knowledge (ZK) roll-up that will give devs access to lower costs while getting the security and network effects that come with Ethereum.
Crypto funds saw $28.5M in total inflows last week, according to the latest CoinShares report. Bitcoin led the way with $27M in weekly inflows, breaking a 3-week streak of outflows.
A U.S. judge approved a motion to let Celsius customers vote on a settlement of class claims to reimburse funds. If approved, a consortium would buy Celsius’ assets, launch a new company and distribute assets + equity in the new company back to Celsius’ customers.
Kraken Ventures is raising $100M for its second crypto fund. A significant portion of the fund will be allocated for “follow-up investments” as well as other early-stage investments.
*This is sponsored content
MILKY MEMES 🤣
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ROADER REVIEW OF THE DAY
VITALIK PIC OF THE DAY
Last name: Ever First name: Greatest
— Milk Road Images (@MilkRoadImages)2:16 PM • Aug 15, 2023
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.
