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September 6, 2023

🥛 1 trend you need to watch out for… 👀

Today’s edition is brought to you by Kraken Pro – the one-stop shop for pro traders backed by one of the most trusted names in the industry. Start trading like a pro.

GM. This is Milk Road, your personal crypto cruise captain – we guide you through the stormy Seas of Volatility so you make it safely to the Promise Land.

Here’s what we got today:

  • Crypto’s new trend: using BTC as margin collateral 🧐

  • Discord’s new vulnerability 👀

  • Visa is teaming up with Solana 🤝

  • Say hello to G-Shock NFTs 🍪

Prices as of 8:15 AM ET. Click here for our Fear & Greed Index

CRYPTO’S NEW TREND: USING BITCOIN AS MARGIN COLLATERAL 🧐

Check it out. There’s been a growing trend in crypto…

Investors are using Bitcoin as margin collateral in futures trading.

  • Since July, Bitcoin futures contracts using BTC as collateral have increased from 20% → 33%.

  • This means investors are using their BTC to back other crypto investments, as well as leverage even more Bitcoin. (It’s the Meal of Champions Degens)

Some analysts are pointing out that this is bad for 2 reasons…

1/ It shows the lack of liquidity in crypto right now

If investors are resorting to putting up their BTC as collateral, it shows there’s a shortage of cash in the market.

Crypto is a lot like the Burning Man festival – stuck with low liquidity.

2/ Using BTC as collateral for a derivative is a double-edged sword

Sure, being able to use crypto as collateral when you run out of cash sounds cool, but it brings more volatility and liquidation to the market.

That’s because when your collateral is also an asset decreasing in price, your lender starts to get worried. And when your lender gets too worried, they liquidate and take your assets.

Blockware Intelligence refers to this as the ole’ “double whammy”.

And once liquidations start, it’s hard to tell when it’ll stop.

As prices go down → positions get liquidated → bringing prices down lower → leading to more liquidations.

It’s a vicious cycle and we’ve seen how liquidations can make prices crash, quickly.

So watch out – this is definitely a trend worth keeping an eye on.

LEVEL UP YOUR TRADING EXPERIENCE

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Disclaimer: Not investment advice. Crypto trading involves risk of loss. Kraken does not offer services to residents of Washington or New York.

DISCORD’S NEW VULNERABILITY 👀

Discord is one of the most popular messaging apps in crypto.

It’s how a lot of projects communicate with their communities and how many investors talk with each other.

Discord is to crypto what AIM was for all the cool kids back in the good ol’ days.

Well, everyone should be aware of a new feature that rolled out to all users…hidden links.

Here’s a quick glimpse at what it looks like:

Why this matters: While Discord is home to many crypto users, it’s also home to hackers, scammers, and rugpullers.

  • Malicious actors have hacked Discord servers for many major projects/artists like Arbitrum, Beeple, and more.

  • NFT drainers have stolen tens of millions of dollars from crypto investors over the last year.

  • There are also “scam-as-a-service” offerings. Hackers create fake websites, sell them to other malicious actors, and then charge 20-30% commission on the assets that get stolen.

And this new hidden link feature just made it easier for scammers to scam. *facepalm*

What should you do? Stay on high alert, keep that head on a swivel, and remember the golden rule…

Milk Road Rule #4: Never click random links.

I repeat, never click random links.

PSA to all Discord server owners: here’s how you can protect yourself (and users in your server) in two easy steps.

P.S. – We’re curious… do you currently use Discord?

Hit “reply” to this email and respond with a simple yes or no!

VISA IS TEAMING UP WITH SOLANA 🤝

There’s a new big partnership in town… *drumroll*…

Visa is teaming up with Solana and Circle to expand its stablecoin settlement capabilities.

Here’s everything you need to know:

  • Certain merchants can now choose to settle payments using USDC on the Solana network vs. traditional fiat currency.

  • This will allow merchants to settle payments faster and cheaper (before this, cross-border settlements could often take days).

  • Visa has already completed a few successful pilots and has transferred millions of USDC over the Solana network.

Solana’s token, SOL, saw a small pump (+4%) after the news dropped.

Why this matters: It shows the power of blockchain tech and stablecoins – faster transaction times, lower fees, and fewer headaches. (the 3 things on every investor’s Christmas list.)

And over the last few months, we’ve seen giants like Visa, Shopify, and PayPal all turn to crypto and start implementing stablecoin payments.

We’ll see who’s next.

BITE-SIZED COOKIES 🍪

Casio is teaming up with Polygon Labs to launch free NFTs based on its famous G-Shock watch. Holders will get access to Casio’s secret Discord channel where users can enter “co-creation” competitions to develop new designs for the NFTs.

Genesis will shut down its crypto trading desk for the U.S. market. The over-the-counter trading platform will close on Sept. 18 – all remaining accounts will be closed on Sept. 30.

Christie's auction house will be auctioning off 5 digital works originally created by Keith Haring. The art was previously only viewable via a floppy disc, but the drawings have now been minted on the Ethereum blockchain as NFTs.

The USDC stablecoin has launched on the Optimism and Base networks. Circle account holders will be able to send USDC transfers to and from both blockchains.

El Salvador will introduce Bitcoin into its schools’ curriculums by 2024. The Bitcoin diploma program will be taught to 150 public school teachers from 75 schools to provide them with a “base knowledge” of Bitcoin.

MILKY MEMES 🤣

Source: @TheBTCTherapist

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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.