June 10, 2024

🥛4 KEY things to watch this week! 👀

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GM. This is Milk Road. We're your crypto caddie – we carry the clubs and give you the best advice on the course.

Here’s what we got for you today:

  • 4 key thing to watch this week 👀

  • What’s holding Bitcoin back? 🕵️‍♂️

  • Chart of the day: Base flips Optimism in TVL 📈

  • Bitcoin miner rejects $1B buyout offer 🍪 

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4 KEY THINGS TO WATCH THIS WEEK 👀

Alright folks, buckle up! This week we've got a lineup of events that could send the markets on a wild rollercoaster ride. Get ready for some exciting developments!

Here’s the lowdown to keep you ahead of the game:

1/ Macro stuff 📊

  • OPEC Monthly Report on Tuesday: Provides insights into global oil production and market trends.

  • Consumer Inflation (CPI) on Wednesday: Shows how much shoppers are splurging, giving us a peek at the economy's mood.

  • Producer Inflation (PPI) on Thursday: Monitors stability in production costs, which is crucial for predicting changes in product prices.

  • Preliminary University of Michigan (UoM) Consumer Sentiment on Friday: Measures consumer confidence and spending outlook.

2/ Fed watch 🏛️

The June Fed meeting is here! Fed officials will share their views on inflation, interest rates, and economic policies this week. 

Markets are pricing a 97.8% chance of no change and just a 2.2% chance of a 25 bps rate cut.

  • Chairman Powell speaks: Wednesday, June 12

  • Additional Fed speeches: Throughout the week

While the chances of a rate cut this month are almost zero (yep, nada), what do you think are the chances of a rate cut in the next 3 months?

A/ Definitely happening 🥳

B/ Maybe, but who knows 🤔

C/ Nope, not a chance 🙅‍♂️

Hit reply and let us know!

3/ Key earnings 💼

Some highlights:

  • Tuesday: Oracle

  • Wednesday: Broadcom

  • Thursday: Adobe, RH and Lovesac

The stock market’s performance this week could influence crypto markets; strong stock results often boost investor confidence, spilling over into the crypto world.

4/ Token unlocks 🔓

We'll see a whopping $210M worth of tokens unlocked across various projects this week.

Some highlights include:

  • Aptos: $95.8M (1.13% of circulating supply, 2.58% of float) unlocks on Tuesday.

  • Arbitrum: $90.8M (0.93% of circulating supply, 3.2% of float) unlocks on Saturday.

  • ApeCoin: $8.5M (0.73% of circulating supply, 1.17% of float) unlocks on Saturday.

Will we see a sell-off or a surge? Stay tuned. 👀 

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WHAT'S HOLDING BITCOIN BACK? 🕵️‍♂️

Bitcoin ETFs were doing the happy dance all of last week, but Bitcoin’s price was as excited as a cat at a dog show. 😑

What’s the hold-up?

Grab your detective hats, and let’s milk the mystery behind these near-record ETF flows.

Bitcoin ETFs have been on fire! Raking in a cool $1.97B of inflows in just the last 7 trading days.

This means big-time investors are pouring money into Bitcoin through these regulated funds. Sounds like the perfect recipe for a price surge, right? 

Well, not so fast.

Despite the avalanche of money flowing into Bitcoin ETFs, the price of Bitcoin didn’t budge much since Friday and even dropped a tad

So, what’s putting a lid on the price action?

Enter this nifty lil chart: the net positions of Bitcoin futures.

It shows the net positions of leveraged funds in Bitcoin futures, highlighting whether they’re betting on Bitcoin’s price to rise or fall.

Here’s the scoop: while Bitcoin ETFs were basking in the spotlight, leveraged funds were busy shorting Bitcoin into oblivion. 

They hit a new record of short positions, meaning they’re betting big on Bitcoin’s price to drop

It’s like a bunch of pessimists at a party, predicting it’ll rain on everyone’s parade – but, these funds aren’t just party poopers; they’re strategic

They employ tactics called "basis trading" or "cash and carry arbitrage". This is where they buy Bitcoin or Bitcoin futures and simultaneously short Bitcoin futures to hedge their bets. 

Here’s how it works: they profit from the price difference between the spot market (where you buy and sell Bitcoin directly) and the futures market (where you make bets on what Bitcoin’s price will be in the future).

This way, they can earn steady returns no matter which way Bitcoin’s price moves. It’s like playing both offense and defense in a game of financial football. Clever, right?

🥛Milk Road Take: So, should you be worried about these short positions? Not necessarily. While these big players are hedging their bets, the fundamentals of Bitcoin haven’t changed.

It’s a long game, and short-term price fluctuations are just part of the ride. Maybe they are just trying to keep the cap on Bitcoin’s price so they can invite more of their big firm friends to the party. 

Stay frosty and keep stacking those sats! 🥛

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📈 CHART OF THE DAY: BASE FLIPS OPTIMISM IN TVL

Base recently flippened Optimism to become the 2nd largest Ethereum L2 by TVL with $7.89 billion.

For context: 

  • Base launched 10 months ago

  • OP launched 2.5+ years ago

Reminder: Base is built on the OP Stack and is actively contributing to the Optimism Collective.

The Superchain is growing regardless. 

A few weeks ago, we predicted that the activity on Base would skyrocket.

We also showed you 5 ways to capitalize on Base’s incredible growth – read this report to get up to speed.

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Defi protocol suffers $19.3M exploit. The lending and liquidity protocol, saw its wrapped ether, wrapped bitcoin, and stablecoins vanish into thin air. The funds were quickly swapped through Uniswap, leaving UwU Lend scratching their heads. Talk about a bad hair day!

FriendTech to move to new Friendchain blockchain. Web3 social network FriendTech is ditching Coinbase's Base for its custom Friendchain. Partnering with Conduit, this shift aims to boost network efficiency. Looks like they're upgrading from a Base model to a custom ride!

Crypto funds see nearly $2B inflows. Digital investment products are swimming in cash, with Bitcoin leading the charge at $1.97 billion. Total assets under management have crossed the $100 billion mark. Time to pop the digital champagne!

Arbitrum's $237M gaming proposal passes despite opposition. The L2's plan to use 225 million $ARB tokens for gaming faced 23.7% opposition. The market wasn't thrilled, fearing dilution. Critics grumble, but supporters are betting on a game-changer. Let's see who wins this round!

Bitcoin miner Core Scientific rejects buyout offer of more than $1 billion. They believe they're worth way more, especially after emerging from bankruptcy earlier this year. Guess when you're sitting on a digital gold mine, you set your own price! — DL News

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MILKY MEMES 🤣

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RATE TODAY’S EDITION

ROADIE REVIEW OF THE DAY 🥛

ROADIE REPLY OF THE DAY 🥛

In Friday’s daily we asked you: Which asset will perform the best from now to 2030?

The winner was $BTC with 56% of the votes!

And here is the reply of the day:

VITALIK PIC OF THE DAY

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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.