Today’s edition is brought to you by Global PYUSD Portal Hackathon - the online hackathon, in collaboration between PayPal and Portal built on Solana.
Applications are open now until August 19 — register here!
GM. This is Milk Road, where the crypto scoops are as wild as that weekend sell-off!
Here’s what we got for you today:
- ✍️ WTF just went on in crypto?
- 🎙️ The Milk Road Show: Crypto's Path to a Billion Users
- 🍪 Grayscale's Bitcoin Trust lost 55% of its $BTC holdings in 1H 2024
Prices as of 9:30AM ET. Click here for our Fear & Greed Index
WTF JUST WENT ON IN CRYPTO? 🤔
Welcome back, Roaders! Normally we’d be hitting you with a full on July recap but a tornado just hit crypto. If you're wondering why your portfolio feels like it's been caught in the new Twister movie, you're not alone. 🌪️
The entire broader financial market has entered correction territory, and it's a volatile ride out there.
Buckle up as we dive into the chaos.
1/ Reverse carry unwinding: The Japanese yen 💹
The Bank of Japan pulled a move we haven't seen in 30 years by increasing interest rates.
This tiny 0.25% hike putt a major kink in the popular reverse carry trade strategy, sending the Yen's value soaring against the USD,
For those new to the game, the strategy involved borrowing Yen at a rock-bottom 0% interest rate and reinvesting in USD for a 5% yield.
Here’s a thread on why the small 25 BPS bump on the Yen contributed to a worldwide market quake:
It's been a profitable ride until now, but like all good things, it must come to an end. ⌛
2/ Jump Crypto
Ethereum plummeted 20% faster than you can say "overleveraged" (if that takes you 4 minutes)
Why is $ETH feeling the heat the most?
WELP, Jump Crypto has been liquidating their $ETH stack for over 10 days… (maybe they had $ETH all tied up in a Yen carry trade 😂)
Enter Jump Crypto's new name:
There's buzz that Jump Crypto shifted hundreds of millions of $ETH and $USDT into centralized exchanges.
Rumor also has it they're exiting the crypto biz amid an investigation. Yikes!
And as if that wasn’t enough, there’s more…
40,000 PYUSD IN PRIZES
40,000 PYUSD in prizes for the inaugural Global PYUSD Portal Hackathon!
The online hackathon, in collaboration between PayPal and Portal built on Solana, starts on August 12th, 2024. 40,000 PYUSD in prizes will be distributed among six winners building on Solana — including dedicated prizes for groups building in consumer applications and DeFi/Payments applications.
Winners will be showcased at the Solana Hacker House in Hong Kong!
Applications are open now until August 19 — register here!
OTHER CATALYSTS AT PLAY 🎲
The Japanese Yen and Jump had a huge effect on crypto but they weren’t alone. Here are the other reasons we’re seeing fear in the markets.
3/ Geopolitical tensions/risks
- Israel vs. Iran: Things are heating up, with fears of a global conflict bubbling. Keep your eyes on the news—this could impact markets further. 🇮🇱🇮🇷
- U.S. Politics: Kamala is closing in on Trump's lead, according to Polymarket odds. The market had already started to price in a Trump win, but now? Not so sure, and the market is feeling that. 🇺🇲
What’s wild is Trump’s election odds and the NASDAQ have been singing in unison for awhile 👇
4/ Recession fears: All eyes on the FED
Job numbers came in below expectations, unemployment ticked up, and The Sahm Rule was triggered (wtf is a Sahm Rule?). 🗒️
Here’s a look at the rule historically overlapped with S&P 500 prices:
SO, a 50 basis point rate cut for September was off the table, but now?
Some are shouting, "We're too late already! Emergency cut now!" ✂️
Rumors are swirling that the FED may have an emergency meeting this week…
We got no cut in July, but the case for it just got a whole lot juicier.
With all that being said, we are not alone…
Bad earnings and political/geopolitical uncertainty have pummeled the stock market back to 2020 levels. 📉
$2T was erased from the market just this morning…
Keep an eye out for potential volatility as investors take profits or rotate their capital, not just in crypto but the broader market.
We’re in for quite the month, friends. Let’s hope it’s a bullish one despite the FUD. 🚀
BITE-SIZED COOKIES FOR THE ROAD 🍪
Onchain DEX and liquidity pool data is now accessible via CoinGecko API. Access extensive data for 3 million tokens and counting – including those not listed on CoinGecko!*
Justin Sun denied rumors of liquidation, emphasizing his preference for non-leveraged trading. This statement came amidst a 17% market drop, where $BTC plunged 13% to $52,864 and Ethereum fell 20% to $2,324. - DL News
Grayscale's Bitcoin Trust lost 55% of its BTC holdings in the first half of 2024. From December to June, the fund's $BTC holdings fell from 620,000 to below 276,000, influenced by competition from new investment vehicles and market dynamics.
Xapo Bank is set to launch interest-bearing Bitcoin accounts in the UK. This move follows their successful acquisition of a UK license, aiming to attract customers by providing interest on $BTC holdings.
New Ethereum wallet addresses have hit their lowest point this year, correlating with the launch of spot ether ETFs in the U.S. This shift suggests that investors might prefer gaining exposure to Ether through ETFs rather than direct purchases. Additionally, Ethereum's active addresses and transactions have also declined, reaching nearly six-month lows.
*this is sponsored content
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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.
