How to filter good vs bad tokens 🕵️♂️
GM, this is Milk Road PRO, the ‘cold plunge of crypto newsletters’ – we keep you focused and alert when investing.
Crypto is a super hot, exciting market—no doubt, that’s why we’re all here.
But if you take Bitcoin out of the picture and compare the rest of the crypto market to stocks…the results are lukewarm at best.
Throughout this bull market, crypto (minus $BTC) underperformed stocks by a long shot!
Sure, there are moments when crypto outperforms—but zoom out, and the bigger picture becomes pretty clear.
Crypto might be a hot and attractive market, but certainly not for investors. Or perhaps we should say not for ALL investors.
Because some investors know the game. Are you that type of investor who reads the instructions on the tin, or are you blindly following the crowd?
Tokens give everyday people a way to invest in thousands of new projects and startups being built on blockchains.
👉 It feels like a big step toward democratizing early-stage investing. Something that used to be reserved for insiders and behind-closed-doors deals.
But it’s not all smooth sailing. Tokens can be created by anyone, at any time—and that opens the door to some tricky dynamics.
These can seriously impact investors, often in ways people don’t fully understand or see coming.
Here is a great example.
Imagine this: you invested in this token back in January 2021 when it had just a $12M market cap... and then it exploded all the way up to $3.2B. Sounds like a dream, right?
It could have been a 277x return if you invested early and sold the top. But the reality was quite different.
Here’s the actual price chart for that exact same token—and yeah, it tells a very different story.
In theory, you could’ve bought in at $1.00 and sold at $6.00. That’s a solid 6x return. But nowhere near the 266x the market cap jump suggests.
So what happened?
You got diluted over time by token unlocks.
There are plenty more ways investors can get screwed in the token world—and we want to walk you through 7 of the biggest ones.
That way, you’ll know what to look out for, how to dodge the traps, and give yourself the best shot at being on the winning side of investing in tokens.
In today’s report we’re going to cover:
- Tokens vs. Equities – How they’re different and why it matters
- Key things to check before buying any token – The red flags and green lights
- How to separate signal from noise in tokens - what’s really going on with these assets
- What it all means for investors – The bigger picture and how to win in this space
Before we get deep into tokens, we have to go back to basics—starting with a simple comparison between tokens and equities.
TOKENS VS EQUITIES
When we say equities, we’re talking about traditional stocks—easy to trade, widely accessible, and something most people are already familiar with.
Now, here’s the thing: tokens and equities are not the same.
They might feel similar at first glance, but they play by very different rules. And if you’re serious about investing in crypto (we mean successfully 🤣), understanding those differences is absolutely essential.
So here is the table comparing those two instruments side by side.
In reality it is not black and white as this table suggests, but you got the point. Let us quickly explain each of them.
1/ Legal ownership
- Equities: ✅ When you buy equities (like stocks), you own a piece of the company.
- Tokens: ❌ Most tokens do not give you legal ownership of the protocol or company. You might get voting rights, but not actual equity.
2/ Regulatory oversight
- Equities: ✅ Regulated by government agencies (like the SEC), so there are clear rules and protections.
- Tokens: ❌ Often unregulated or in a gray zone. Rules are still evolving, and protections for investors are weaker or non-existent.
3/ Main purpose
- Equities: ownership The main point is to give investors a share in the company and its profits.
- Tokens: governance Most tokens are used for voting on how a protocol or project works for now (e.g, changes in fees or roadmap decisions).
4/ Transparency
- Equities: audited financial reports Companies publish financial statements that are reviewed by auditors.
- Tokens: onchain data Some activity is visible on the blockchain, like transactions or tokens issued. But things like expenses might be hidden.
5/ Trading hours
- Equities: limited You can usually trade only during stock market hours (like 9:30am–4pm on weekdays).
- Tokens: 24/7 Crypto trades all day, every day.
6/ Liquidity
- Equities: ✅ Stocks, especially big ones, usually have deep markets — you can buy/sell easily.
- Tokens: ❌ Many tokens, especially smaller ones, can have low liquidity — harder to trade without big price changes.
7/ Investor dilution
- Equities: ❌ Equity investors usually have some protections against unfair dilution (like rights to participate in new funding rounds).
- Tokens: ✅ Token holders are often diluted by unlocks or new incentives — and they usually can’t stop it unless they control governance.
8/ Self-custody
- Equities: ❌ It might feel like you truly own your shares, but in reality, it’s just a digital entry in some database. If your broker goes under, getting your stocks back could turn into a long and messy process.
- Tokens: ✅ With tokens, you can be the actual owner—no middlemen needed. If you want full control and to cut out intermediaries, tokens make that possible.
In short: Stocks might not trade around the clock like crypto tokens, but they’re still a more solid investment for most people.
Why? Because you get stronger legal rights, better investor protection, and more transparency—it’s a safer, more regulated playing field.
But let’s be clear—we’re not here to hate on tokens.
The bumps in the road are just part of being early to something big. Crypto is still in its early innings, and with that comes both risk and serious upside.
The biggest wins? They usually go to those who truly understand how the system works.
So let’s dive in and unpack the crypto game—so you can see what makes tokens tick, what risks are in play, and where the real opportunities hide.
Uh, Oh… 😧 The rest of this report is exclusive to Milk Road PRO members!
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WHAT’S LEFT INSIDE? 👀
- How to calculate intrinsic token value
- How to navigate token unlocks & inflation
- The percentage of airdrops that actually work long term
- Why token incentives work for some projects, but not others
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