May 14, 2024

🥛 SELL or HODL: the art of valuing an airdrop 🪂

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GM. This is Milk Road, back with a fresh scoop of crypto crunch. 

Here’s what’s on the menu today:

  • How we value an airdrop 🪂

  • Chart of the day: Who owns the most Bitcoin? 🥇

  • PRO “Where are we in the cycle?” indicators 📊

  • Pixels game hits 1M daily users 🍪

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HOW WE VALUE AN AIRDROP 🪂

Airdrops have been happening left and right, and everyone’s excited to get their care package. 

Okay, so you scored an airdrop, but what in the crypto should you do with it now? Should you HODL that token or move profits to another?

Well… for obvious reasons we will not answer that question.

INSTEAD, we will let you in on what we look at: relative value and comparables – two different methods to help righteously value airdropped tokens.

Here’s a handy framework to figure this out:

We use Fully Diluted Value (FDV) and Total Value Locked (TVL) to represent relative value and compare those metrics to similar projects:

For example, let’s take a look at $MODE (compared to Manta and Metis):

  • Mode has a fully diluted value (FDV) of $376M

  • That's 76% lower than Manta Network's $1.57B and 32% below the $551M valuation of Metis.

  • Yet Mode has only 12% less total value locked than Manta.

Mode is also further along in decentralization than both others according to L2 Beat’s metrics shown in the left box below.

Not only that, Mode has 3.7x the daily active users and 4.4x the daily transactions of Manta!

We haven’t included Metis here as it is a total ghost town.

🥛 Milk Road Take: Mode appears significantly undervalued next to its Layer 2 competitors when you stack up the usage and fundamentals. 

For the Milk Man, it looks like a no-brainer to stake and HODL this one. The two methods, relative value and comparables are key, kinda like in real estate! 

Of course, there is plenty more at play when valuing an asset, but hopefully this helps paint a nice picture for you. 

For more insights, check out our podcast with Mode’s founder James, on YouTube, Spotify or Apple Podcasts.

Did you receive the Mode airdrop?

A/ Yes

B/ No

Hit reply and let us know!

P.S. If airdrops are your thing, make sure to check out our Airdrop Guide so you don't miss the next one.

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CHART OF THE DAY: WHO OWNS THE MOST BTC? 🥇

The one million satoshi question everyone is wondering. Who holds the biggest bags?

While no entity owns more than 2% of the 21M supply, the top accounts control a huge chunk:

Here’s the most interesting parts:

  • Microstrategy owns more than the world’s largest 2 economies

  • UK, Germany, Ukraine COMBINED own less than any of the top 3 alone

  • 6 countries and 9 companies are holding

  • Almost 18% is estimated to be lost forever due to locked wallets and forgotten keys. Ouch!

  • El Salvador closes the list with 5,690 BTC and COUNTING

Note: El Salvador is still committed to buying 1 BTC a day and even recently launched a tracker.

Outside the chart, the majority (57%) is held by individual investors, though this is likely concentrated among whales.

So while highly distributed, Bitcoin's fixed supply means the whales have an outsized impact on market movements.

Who will be at the top in 5 years? We’ll have to wait and see!

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PRO “WHERE ARE WE IN THE CYCLE?” INDICATORS 📊

Crypto moves in cycles, and knowing where we are in the current cycle is crucial for capturing the best opportunities.

The goal is to spot the bull market peak before the inevitable bear market hits your bags hard.

Since timing the top perfectly is almost impossible, we use various indicators to give us a better shot at taking profits before it's too late.

Here are the 5 indicators we track, with a color-coded system to show how close they are to signaling the market peak:

🟢 Plenty of room to run 🏄

🟡 Getting closer to the top signal, but haven’t yet reached the mark ⚠️

🔴 We’ve hit the market top indicator 🚨

Every Tuesday, we update these 5 indicators exclusively for PRO members.

Our advice? Don't wait for all of them to hit 🔴. It's better to take profits as they get closer to that point.

Let's dive in and see if we're anywhere near the top of this bull market. 👇

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GO PRO AND UNLOCK:

  • Full access to the 5 bull market peak indicators above. 👆

  • Our weekly reports that help you invest successfully in crypto. 💰

  • Full access to the Milk Road PRO community. 🫂

PRO REVIEW OF THE WEEK

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BITE-SIZED COOKIES FOR THE ROAD 🍪

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Blockchain Game 'Pixels' Hits 1 Million Daily Users. The web3 farming game players are attracted to the ability to earn the PIXEL token while playing, with $1.6 million worth spent in the last month.

China Busts Major Crypto Money Laundering Ring. Chinese authorities cracked down on an underground bank illegally exchanging yuan and won using cryptocurrency, estimated to handle $296 million. 

Next wave of crypto adoption will be driven by AI. AI agents can optimize crypto transactions for mainstream adoption, while crypto's decentralization counterbalances AI's centralized control.

Tornado Cash Developer Convicted of Money Laundering. The prosecution argued Tornado Cash facilitated laundering of $1.2 billion. Despite Pertsev claiming he couldn't control how the decentralized tool was used.

Coinbase hit by system-wide outage. This left users unable to access their accounts or make transactions. The exchange says it is investigating the issue and working to restore services, assuring users that funds remain safe.

Wanna team up with the Milk Man? We currently have 4 positions open – check ‘em out and apply here!

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MILKY MEMES 🤣

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ROADIE REVIEW 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.