June 14, 2022

🥛 The three big things we’re watching right now

Notice: Undefined index: _wpupa_attachment_id in /home/runcloud/webapps/milkroad/wp-content/plugins/wp-user-profile-avatar/templates/wp-author-box-social-info.php on line 90

Notice: Trying to access array offset on value of type null in /home/runcloud/webapps/milkroad/wp-content/plugins/wp-user-profile-avatar/templates/wp-author-box-social-info.php on line 90

GM. This is the Milk Road, where we’re still here.  We’re still here for you, no matter what happens in the markets!

Let’s get into it:

  • 🐻 The 3 Stages of the Bear

  • 👀 The three key things we’re watching now

  • 🚨 Previous Bear Market Memories

Estimated read time: 3 minutes & 49 seconds


Yesterday was full Panic! At The [Twitter] Disco. 

Prices continued to drop like bricks in the ocean, and my Twitter feed was up in arms. It felt like I was reading the graffiti inside middle school bathroom stalls…

But there was one really good thing I read amidst all the chaos yesterday. It was called “3 Stages of A Bear Market” from our buddy Jason Yanowitz over at Blockworks. 

It was the best damn thing I read all day. So in Milk Road fashion, we’re gonna share it.

Jason splits the bear market into 3 different stages and he thinks we just entered the second stage of it. 

Let’s break down what the stages looks like:

Stage 1: The Unwind

In Stage 1, the excitement (and greed) from the bull market still exists.

Mini-narratives pop up for weeks at a time. Assets still have floors. Valuations are cut but companies don’t make the tough decisions (kill products, layoffs).

Things seem alright.

Stage 1 doesn’t *feel* like a bear market. It feels like prices have pulled back to “realistic” valuations.

Investors continue allocating, builders keep building… In general, life is good. Only the weak hands sell.

Stage 2: Forced Capitulation

This is where it gets ugly.

Narratives die. Prices fall 90%… then another 90%. Layoffs across the board. Mainstream media and cynics rise up in Stage 2. They laugh and shout “I told you!”

Luna sent us into Stage 2.

In Stage 2, diamond hands become forced sellers. They sell not because they want to, but because they have to. 

Celsius doesn’t want to sell – they might have to sell. There will be more funds, companies, and individuals like Celsius.

In Stage 2, any bounce will be immediately sold into. The dead cat bounce.

Companies that need high token prices will be crushed. Founders that buy their own tokens to sustain their projects… they’ll also get crushed.

The lower prices go, the louder the bears get. The louder the bears, the lower the price goes. This creates a vicious cycle.

In Stage 2, prices crash violently. Excitement is replaced by anger.

Stage 3: Bottomless Exhaustion

After max pain comes max exhaustion.

There are no bounces. There are no narratives. Prices consolidate sideways or slowly move down. It’s boring. At the bottom, anger is replaced by silence. 

During Stage 3, you’ll want to walk away. 

Regulators will kick us while we’re down.  Your favorite Twitter degens will go quiet. Web2 investors will quietly stop allocating. Talented builders will leave. Companies will shut down. You’ll question every assumption you had. 

Stage 3 is the toughest to survive. 

If you’re a company, do whatever it takes to get through. If you’re a builder, stay interested. Find other builders. Buidl with them. If you’re an investor, develop your own theses. Take bets on people you believe in.

Don’t lose sight of the big picture. We’re building an open, permissionless world. It will take decades, not years.

Close the computer, zoom out, go for a walk. 

Just don’t give up.


As Jason mentioned, in Stage 2, there’s a lot of forced selling aka liquidations.

And right now there are three big dominoes that we’re watching:


Michael Saylor (the CEO of Microstrategy) bought 129,218 Bitcoin at an average price of $30,700. Today that investment is down ~$1.1b.

They also recently took out a $200m+ loan (to buy more bitcoin). This loan is subject to a margin call if BTC reaches $21,000. 

This isn’t too worrisome yet since Microstrategy still has billions of unused Bitcoin collateral to put up. However, there is a much bigger liquidation that would happen if Bitcoin reached $3.5k. Even then, Saylor says there is additional collateral they can post if it came to it.

We’re keeping a close on this one since Microstrategy is one of the top Bitcoin holders. 


Celsius has stopped allowing withdrawals because they are facing liquidation problems. And it’s been a game of back and forth for them. 

At first, their liquidation price was ~$22k, but they’ve been putting up more and more collateral as the price of BTC drops, to avoid liquidation.

As of now, they’ve put up $535m in Bitcoin collateral to bring their liquidation price to $15,100. As long as the price stays above that, they’re in the clear.

But if it goes under, that’s another half a billion dollars worth of BTC getting sold into the market. No Bueno.

ETH Liquidations

And there are also reports that there will be $400m in liquidations if ETH goes under $1000


Times like these can feel especially bad, especially when the media adds fuel to the fire and your Uncle Joe says: “Told ya crypto was a scheme!”.

So let’s jump into a time machine and look at 8 headlines from previous bear markets:

2015 BEAR

Headline: The End Of Bitcoin

Date: February 5, 2015

Quotes: One of the signs that Bitcoin is dying is that hardly anyone actually uses the currency. The Bitcoin network is fading away and the price is destined to continue its downward march. This is likely to be the last year people take Bitcoin seriously (if last year wasn’t already). Whether Bitcoin disappears with a bang or a whimper, the end is coming.

Price: $216 

$1,000 investment would be worth: ~$104,000

Hate to break it to ya, Rob, but 1/ 2015 was definitely not the last year people took Bitcoin seriously and 2/ you missed out on a 100x gain

Headline: Bitcoin Isn’t The Future Of Money — It’s Either A Ponzi Scheme Or A Pyramid Scheme | Washington Post

Date: June 8, 2015 

Quotes: It’s not clear what Bitcoin is or what it will be, but it is clear what it’s not. It’s not a currency. People don’t set prices in Bitcoin and, for the most part, don’t buy things with it either…. 

Price: $228

$1000 investment would be worth:  ~$99,000

You can buy lots with crypto now – cars, movie tickets, college tuition, etc. It’s even a legal currency in some countries. Shoutout to El Salvador and the Central African Republic.

Headline: Bitcoin Will Bite The Dust 

Date: July 12, 2015 

Quotes: Even in the unlikely event that it survives into the medium run, we would still rate its longer-term chance of survival as zero.

Price: $310

$1000 investment would be worth: ~$73,000

This was actually a 26-page paper on the end of bitcoin.

The only thing that bit the dust are the investors that missed out on such cheap prices. $300?!?

2017/2018 BEAR

Headline: Bitcoin Will Never Be A Financial Mainstay

Date: February 27, 2017

Quotes: Bitcoin, with all the noise and talk of large-scale acquisitions, is just a playground for those wanting a quick buck and will never be part of the genuine electronic financial markets economy.

Price: $1,100

$1000 investment would be worth: ~$21,000

It’s only a matter of time till we’re able to use crypto to buy almost everything. It’ll be the largest playground there is. 

Headline: Jamie Dimon And Warren Buffett Have The Last Laugh On Bitcoin | Bloomberg

Date: November 21, 2018

Quotes: Nothing on the Bitcoin label turned out to be in the bottle. As a means of payment, it is cumbersome, volatile, and expensive. It has destroyed value rather than storing it. Its decentralized technology was sold to investors as being unique. It has been anything but.

Price: $4,500

$1000 investment would be worth: ~$5,000

The only thing to laugh about is how quickly Jamie Dimon switched teams. Now he wants JP Morgan to lead the crypto movement. But we got the receipts!

Headline: Bitcoin Has No Unique Value At All | CNBC

Date: February 25, 2019

Quotes: “Bitcoin has no unique value at all. It is a delusion, basically. If you do something phony by going out and selling yo-yos or something, there’s no money in it — but when you get into Wall Street, there’s huge money. It attracts charlatans.”

Price: $3,850

$1000 investment would be worth: ~$5,900

There goes the sociopathic grandpa from Omaha again. 


Ba da ba ba baah, I’m Lovin’ It.

That’s all for today folks, see ya tomorrow!

Shaan aka “Elon’s chocolate milk”Ben “2% Milk” Levy

A Review from the Road…

As we’re entering phase 2 of the bear market, what are you doing with your crypto?

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.