GM! Welcome to Milk Road PRO – the newsletter that never drops its support (unlike your portfolio).
It’s been four months since we launched the Milk Road Portfolio, and now is the perfect time to reassess our positions and see if our investment thesis still holds strong.
Today, we’re zeroing in on our DeFi positions, which account for 6 of our 11 holdings and represent 12.5% of our portfolio.
(Want to get the full picture? Click here to view our complete portfolio!)
We’re going to break down our investment thesis, protocol progress and price predictions for each of our DeFi positions in just a second, but first, let’s reflect on the sector’s overall performance in the last few months.
We launched our Milk Road PRO portfolio on May 1st, 2024, and since then, the entire market has faced a downward trend.
Naturally, this means all our DeFi positions are currently in the red too. 🔻
The total crypto market cap is down just 1%, largely due to Bitcoin's strong performance. However, $ETH has dropped by 11%, and the DeFi sector is down 14%.
But, does this mean that DeFi is failing? We don’t think so.
We think the sector is still evolving, and the downturn could simply be a temporary phase in a broader growth trajectory.
Many DeFi projects are continuing to innovate and expand, laying the groundwork for future success. 💪
In fact, some DeFi projects are experiencing significant revenue growth even as their valuations continue to drop.
We can see that the annualized revenue of these four selected DeFi OGs is at all-time highs (ATHs), which has driven their valuations to historically low levels, with a price-to-revenue ratio of 24.
(To put this in perspective, the S&P 500 currently sits at a price-to-earnings ratio of around 32).
This disconnect suggests that while market sentiment may be bearish, the underlying fundamentals of these projects are strong and improving over time. ⏰
So, how long until DeFi finally takes off?
We've already seen some early signs with $AAVE experiencing explosive growth, leading some to call this the beginning of a "DeFi renaissance."
But is DeFi really gaining more attention, or is this an isolated incident?
Let’s take a look at the chart of DeFi mindshare, which shows how much people are talking about DeFi on Twitter.
Just three months ago, only 7% of Crypto Twitter was discussing DeFi. Now that mindshare has nearly doubled to 13%. 📈
This shift could signal a turning point for the sector.
As DeFi starts to regain attention, we need to ensure that our portfolio is packed with strong projects boasting solid fundamentals—projects that are poised to thrive in this potential trend.
If any of our current holdings don’t measure up, it might be time to consider cutting them loose.
Let's dive into our 5 DeFi positions to assess recent developments and whether they reinforce our bullish outlook. 🔦
PS: We won't be covering Aave in today’s report since our focus is on revisiting our existing positions. $AAVE was added to our portfolio only recently, so there's no need to reassess it at this time.
Here’s the agenda for each of our positions in today’s report:
- KPIs: A quick snapshot of key performance metrics.
- Recent developments: An overview of the latest strategic moves, new integrations, and any game-changing announcements.
- Price movements: An analysis of recent price trends and how these projects are navigating the volatile market.
- Conclusions: Insights on whether our investment theses for that position remains strong.
Sound like something you want to learn more about? Great! Let's jump into it. 👇
MAKER ($MKR) 🌃
Uh, Oh… 😧 The rest of this report is exclusive to Milk Road PRO members!
WHAT’S LEFT INSIDE? 👀
- How Maker’s rebrand to ‘Sky’ could make it the DeFi central bank.
- Lido’s plan to navigate SEC challenges and still come out on top.
- Why Jupiter’s control over Solana’s blockspace could make it a DeFi powerhouse.
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