PLUS: Why good news means nothing right now 🧘♂️
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GM. This is Milk Road, the newsletter that makes you so smart about crypto that strangers start to ask "do you work in the industry?"
Here’s what we got for you today:
- ✍️ The U.S.' $7T ticking time bomb
- ✍️ Why good news means nothing right now
- 🥛 PRO “Where are we in the cycle?” indicators
- 🎙️ The Milk Road Show: 3 Core Crypto Investing Principles + Is AVAX Season Coming? w/ Zeneca
- 🍪 Nasdaq-listed company adopts $ETH as its primary treasury asset
Prices as of 2:00 PM ET. Click here for our Fear & Greed Index.
THE U.S.’ $7 TRILLION PROBLEM 💸
The US has a BIG problem…
They have to pay off $7 TRILLION worth of debt in the next 6 months. The thing is, the US doesn’t have a spare seven trillion to drop (they spent it all).
So what’re they going to do? Refinance (aka: take out another loan, to pay off the old loan).
Problem is, when they took the initial $7T loan back during the COVID era, rates were at zero – and right now, they’re comfortably above 4%.
Which means the US government needs to get rates down ASAP (or risk getting slapped with even crazier debt repayments in the future).
The issue? The USA economy has been too strong. A strong dollar and a strong economy means no way to lower rates…especially if inflation is rising.
…so what’s a quick way to get rates down? A good old fashioned growth scare.
(‘Cause if everyone thinks the US is going to stop growing, they’ll pull their money out of the economy, weaken the dollar and thus, tank rates.)
One way to stir up a growth scare might be to:
- Have Trump announce tariffs that will slow down trade
- Set Elon Musk loose on thousands of government jobs
- Have a very public/chaotic argument with Zelensky (Ukraine president), stoking fears of further global unrest
If this is Trump’s plan…it seems to be working so far.
Here are some charts that double as a measure of the US economy’s strength (remember: a weaker economy leads to lower rates). 👇
1/ The 10-year yield: down
Over the past ~2 months, 10-year yields have fallen from 4.79% to 4.22% (but still have a way to go 😳).
2/ The $DXY (which tracks the value of the US dollar): down
…and down quite rapidly – the $DXY has seen its sharpest 2-day decline since July 2023.
3/ Truflation: down
Truflation tracks inflation in real-time (as opposed to the CPI, which is a lagging indicator). Less economic activity/growth = less room for producers to hike prices.
Now – lettuce be very clear:
This whole ‘Trump is tanking the economy to refinance at a better rate’ theory is exactly that: a theory. Totally unproven.
Trump could be an idiot with no grasp on basic economics, or he could be playing 4D chess.
Or maybe it sits somewhere in the middle – where he ain’t too bright, but he has giga-brained people on his team that are playing 4D chess on his behalf…
Either way, the US needs rates to go down in order to refinance.
And the good news is: most of the potential tactics we laid out (tariffs, Zelensky, DOGE) are all largely within the control of the US government.
So the ‘short term pain for long term gain’ scenario, in which:
The US economy dips in the short term → the government refinances → then axes tariffs, makes peace w/ Zelensky, and slows DOGE’s firing spree, in order to pump the economy (all while pushing its debt obligations forward a decade👇)?
That’s a real possibility.
Again, none of it is set in stone – but if you’ve been wondering “what is with this sh*t show of a government?? The madness never seems to end”.
This is a potential answer.
Will it work? No idea – we hope so! Because if it does, it means:
- Things aren’t as bad as they seem
- Markets will rocket from here
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WHEN WILL GOOD NEWS MEAN SOMETHING AGAIN? 🤔
This is your daily reminder to zoom out, n’ zen out.
‘Cause if you’ve been even vaguely plugged into the crypto news cycle of late, you might have started running some mental comparisons…
The positive news stories that seem to be breaking every other day are having very little effect on the market – hell, if the charts are anything to go by, they’re having a negative effect!
Which is weird, ‘cause if half of the recent stories broke this time last year, they would have made markets run faster than my little cousin Jeffrey on a sugar high.
Here’s a snapshot of just some of the stories that have broken:
- The US-based crypto ETF pipeline is expanding
- The White House hosting a Crypto Summit (this Friday)
- Rumors of capital gains tax on crypto being axed in the US
- Forward movement on US-based Bitcoin and Crypto Reserves
- US States proposing their own bills for Bitcoin Strategic Reserves
- Brazil announcing today that their treasury is going to start buying Bitcoin
- The SEC drops its cases against Coinbase, Robinhood, Uniswap, and more
All of that since the day of the inauguration (Jan 20) – and the total crypto market cap looks like this?
Now, here’s what you need to remember:
Nothing is permanent (this rough patch included).
The macro ‘growth scare’ that we covered in the first article is working to counteract any potential optimism generated by these positive steps forward.
Kinda like a soccer ball being held underwater – the market wants to react, but it’s being held down.
The exciting part is, if/when macro conditions (i.e. everything we covered in our first article) reverse, the soccer ball will be released, and the impact of these stories will be able to be felt.
Need a visual aid? Here, have a visual aid:
The takeaway:
Zoom out, zen out, and before you know it – good news will mean something again!
PRO “WHERE ARE WE IN THE CYCLE?” INDICATORS 🤔
You might have read today’s articles and thought:
“Damn, these guys are strangely optimistic in the face of bleeding markets…I don’t get it.”
Fair assessment tbh – but the reason for our confidence? The crypto cycle indicators.
Knowing where we are in the crypto 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.
Below are the 6 indicators we track, with a color-coded system to show how close they are to signalling 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 Thursday, we update these 6 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. 👇
Already a PRO member? Log in here.
GO PRO AND UNLOCK:
- Full access to the 6 bull market peak indicators above to help you spot the bull market top before it’s too late 📈
- NEW: Unlimited access to the Milk Road PRO Token Center with token ratings and insights. 🔓
- The Milk Road PRO Portfolio, our yield strategies & weekly updates to help you manage investments, allocate capital, take profits, and stay ahead in crypto 📊
- Weekly reports that help you spot early trends, navigate the markets by limiting risk & catch those sweet cha-ching moments 💰
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PRO REVIEW OF THE WEEK
BITE-SIZED COOKIES FOR THE ROAD 🍪
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The ECB cuts rates by 25bps (again). It’s wild how no one is actually talking about this on twitter - it’s just flying under the radar.
Use case of the week, baby! An Indian town is using the Avalanche blockchain to digitize more than 700,000 land records.
Nasdaq-listed company adopts $ETH as its primary treasury asset. Exciting news until we realised their market cap is only $6 million and their stock has been down only. Shame.
$COIN might be coming onchain. If this turns out to happen soon, it’s going to be huuuuuge.
World Liberty Finance adds $SUI to their strategic token reserve. Do these guys do anything but just buy crypto tokens?
Want a cash loan without selling your crypto? SALT lets you lock up your crypto as collateral and get fiat loans in return. Yep, this is a thing—and it’s pretty genius.**
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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.
