July 28, 2022

🥛 The Fed drops the hammer, crypto responds!

GM. This is the Milk Road, the newsletter that has your back like that friend that reminds you when it's another friend’s birthday.

The Fed has raised interest rates, the GDP declined again this quarter, and we might be heading towards a recession… but you know who doesn't seem to care about that?

CRYPTO PRICES! We're in the green zone.

Here's what we got for ya today:

  • BTC & ETH are surging after Fed raises interest rates

  • Coinbase Ventures loves Solana, here's why

  • Weekly crypto funds report

  • Meme of the day


Yesterday was everyone’s least favorite day – FOMC Interest Rate Hike Day. It’s like pop quiz day in middle school aka the day I would always have a “cough.”

The Fed announced they’re raising interest rates by 75 basis points. Which is lower than what most people were expecting (100 basis points).

What else did the Fed say?

  • Another "unusually large increase" in rates could be appropriate in September

  • They're no longer providing clear guidance on future rate hikes. Decisions will be made meeting by meeting

Here's how the crypto markets reacted:

  • BTC: +10.2%

  • ETH: +13.6%

  • SOL: +12.5%

And here's the best from Twitter:

The cherry on top? The GDP declined by 0.9% this quarter.

This is the second straight quarter of negative GDP, which means you’ll be hearing the “r” word a lot… because technically, we’re in a recession.


It’s been a tough few months for Crypto…

Kind of like the opening scene of one of those apocalypse movies (you know when the aliens turn up)

Well don’t worry, the reinforcements have arrived. Here is a pro tip from the brain boxes at the Milk Road:

Diversify, diversify, diversify.

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Every major exchange invests in companies. And Coinbase is no different, its venture arm has invested in over 270 companies and its portfolio is worth ~$6.6b.

They just released their Q2 investment memo and there’s one big theme…they like Solana.

Here’s why:

1/ A clear uptrend in Solana developer activity. Ethereum is still king, but Solana’s growth can’t be ignored.

The programming language community for Rust (Solana's smart contract language) has tripled in size over the last two years.

2/ New stability & performance updates. Yes, Solana has been known for having outages as frequently as I snooze my alarm. But they just rolled out the Mainnet Beta v1.10 which is introducing stability & performance improvements to help with network congestion.

3/ Partnership support. Popular platforms like Alchemy, Chainlink, and others are all rolling out Solana support soon.

Coinbase Ventures' Overall view on Solana: “It’s an alternative to Ethereum that continues to witness high growth and developer activity since inception. However, sustained growth will be dependent on their ability to balance network design innovation with restoring trust in the network’s performance.”

Translation: Keep your eyes on Solana 👀


The results for the latest Weekly Crypto Funds Report are in… there was a total inflow of $30m last week.

The 4th straight week of inflows! Can I get a hell yea?

Some of the highlights:

  • ETH sees another week of inflows. A total of $128m has been poured into ETH over the last 2 weeks – the largest back-to-back weeks of inflows since June 2021. Looks like the Merge has some investors bullish on ETH..

  • BTC shorting slows down. Only ~$0.6m was invested into BTC Short funds. This makes sense given the recent BTC positive price action over the last week.

  • Month-to-date inflows reach $394m. The 2nd largest month of inflows this year.

But the biggest highlight is the fact that the prior week’s report has been corrected – it's been updated from $12m → $343m in inflows.

That’s the largest single week of inflows since November 2021. (aka that Thanksgiving when cousin Andrew convinced all the Uncles to invest in Bitcoin between bites of turkey).


That's a wrap for today, ladies & gents. See ya tomorrow!

Ben "2% Milk" Levy & Diego "El Lechero" Salinas



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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.