🥛 More pain incoming? 🫤

GM. This is Milk Road, the crypto newsletter that turns “WTF is happening?” into “Ahh, got it”.

It’s Thursday - which means Tomas is walking us through everything we need to know about macro right now!

Here’s what we’ve got for you today:

✍️ The energy supply squeeze continues.
🎙️ The Milk Road Show: The ETF Multiplier Effect: Why Bitcoin Could Still 10-20x From Here w/ Cory Klippsten.
🍪 Coinbase just launched the x402 Foundation.

Midnight is a fourth generation blockchain that just launched last week. Check out their launch announcement here.

Prices as of 2:00 p.m. ET. Trade today with Milk Road Swap.

THE BIGGEST ENERGY SUPPLY SQUEEZE IN HISTORY CONTINUES 🛢️

The Iran war rages on, and the vital Strait of Hormuz waterway remains closed.

This is a very bad environment for the global economy.

If this situation doesn’t change, we’ll likely see meaningfully higher energy prices, widespread physical energy shortages, and intensifying economic damage.

Over time, negative economic effects will likely ripple across the world, starting in the most heavily affected areas (Asia, Africa, some parts of Europe) and spreading further.

So what’s going on, what does it mean, and when will it end?

Let’s take a look…

So, what’s the latest with the war?

Here’s a rapid-fire round-up of all the important noises that have been made this week, on both sides of the conflict.

If you can make any sense of all this - let me know…

The Islamic Republic has “the necessary will to end this war,” but only with “guarantees”, according to Iranian officials.
Those “guarantees” may include assurances to prevent further fighting, war reparations, and sovereignty over the Strait of Hormuz.
President Trump said the U.S. is “not going to be there too much longer,” adding that the Strait would open “automatically”.
Later, he said he would leave it to other nations to resolve issues with the Strait of Hormuz.
Then, Trump claimed Iran wanted a ceasefire, but in the same post, he said he would “blast Iran into oblivion” until the Strait is reopened.
Iran said Trump’s comments about a ceasefire were “false” and “baseless”.
New York Times reported that U.S. intelligence has determined that Iran is not willing to engage in negotiations.
Meanwhile, reports suggest that more than 50,000 American troops are now deployed in the Middle East, potentially foreshadowing a ground invasion.
And Iranian officials say they have 1,000,000 troops ready to deploy in the event of a ground invasion.

Confused? Yeah - so am I.

What are the odds?

So what in the world is going on? Let’s take a whirlwind tour of Polymarket to get a sense of what the consensus view is currently.

According to speculators on Polymarket, there is a 24% chance of a ceasefire by the end of April, rising to 45% by the end of May.

Source: Polymarket

There’s a 13% chance that Strait of Hormuz traffic returns to normal by the end of April.

Source: Polymarket

There’s a 63% chance that U.S. forces will enter Iran by the end of April.

Source: Polymarket

Plus, an 89% chance that the Iranian regime survives U.S. military strikes.

Source: Polymarket

So, what is Polymarket currently saying?

Essentially:

America likely initiates a ground invasion of Iran in April.
The Strait of Hormuz likely doesn’t return to normal for another month at the very least.
A ceasefire is some way off, potentially not happening until the summer.
The Iranian regime is likely to survive the war - however long it lasts.

So what does it all mean for markets?

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THE BIGGEST ENERGY SUPPLY SQUEEZE IN HISTORY CONTINUES (P2) 🛢️

Investors have been getting used to TACO headlines since Trump took office last year.

(TACO = Trump Always Chickens Out.)

This refers to several occasions in the past year when Trump has initiated a move or a policy, usually tariff-related, and then quickly walked back on that move after a negative market reaction.

But we’re no longer in TACO headline world anymore.

We’re in a new world. The world of the NACHO headline.

Not Actually Changing Hormuz Opening.

The Strait of Hormuz is the most important thing for markets. As long as it’s closed, at least 10% of the world’s oil supply is killed off with every passing day.

Every day, the total energy shortfall stacks up higher and higher.

And it really doesn’t matter what Trump says, if the Strait is still closed, risk asset markets probably won’t be happy.

This is the one thing.

And Trump doesn’t appear to be able to provide a fix for the Strait issue, at least not yet. We’ve seen this dynamic play out three times in the past week.

A potential TACO headline emerges, raising hopes of de-escalation and prompting a positive market reaction.

Until investors realise that it’s actually just a NACHO headline, there’s no imminent re-opening of the Strait, and the market fades away again.

On Tuesday, we did see an impressive rally across risk assets.

In particular, the S&P 500 shot up 2.8% in a single day, its best daily rally since May 2025.

Source: TradingView

But this particular surge was largely “mechanical” in nature.

It was fueled by positioning dynamics and month-end/quarter-end rotation, including a massive pension fund rebalancing involving $34 billion in equity purchases, the eighth largest in history.

Source: Goldman Sachs

So it’s tough to draw too many conclusions from the price action we saw on Tuesday.

Brent crude oil continues to settle above $100 - the “stagflation zone”.

Source: TradingView

And risk assets, like equities and Bitcoin, just continue to move in the opposite direction to oil.

Source: TradingView

Oil will likely continue to move higher over time as long as the Strait remains closed.

So, we’re back to the same issue - just reopen the damn Strait.

This energy supply shock has put us on the path towards a serious global growth slowdown/recession.

This path could change course, but probably only if/when the Strait of Hormuz reopens.

And the longer it stays closed, the more damaging the economic consequences will be.

Crude oil settling where it is now (around $100) is already quite a bad environment - but moving higher and remaining above $120 would be a lot worse.

This week, I’ll be publishing my monthly Macro PRO report - where I will go into detail on the current situation and what I’m doing.