Home > Daily > 🥛Powell speaks. Markets react. Here’s what happened… 👀
March 8, 2023

🥛Powell speaks. Markets react. Here’s what happened… 👀

GM. This is Milk Road. If you like Pina Coladas and getting caught in the rain, this is the crypto newsletter for you.

Here’s what we’ve got today:

  • Jerome Powell speaks on the markets

  • Graph of the Day: Another week of crypto outflows

  • Vitalik dumps $700k worth of shitcoins

  • Web3 Wednesday: Top jobs in crypto

Today’s edition is brought to you by Crypto 101 and the Crypto Hedge Fund Summit, the go-to conference for top investment strategies.

JEROME POWELL SPEAKS ON THE MARKET

Jerome Powell testified in front of the Senate Banking Committee yesterday. It’s a semiannual thing where regulators and bankers get together to talk about monetary policy.

It’s kinda like when the fellas meet up at the barbershop – except instead of talking about sports, they talk about the economy & government debt.

It gets boring and can be hard to understand, so we decided to put Powell’s quotes into MilkGPT’s translate feature to take out all the bullsh*t for you.

Here’s what it spit out:

JPOW: “I have genuine reservations about permissionless blockchains. They are so susceptible to fraud and money laundering. […] But stablecoins could have a home with proper regulation. […] We don’t want to stifle innovation.”

MilkGPT: I don’t really understand this crypto thing. At the same time, there are some promising use cases and we shouldn’t regulate it to death.

JPOW: “There is only one solution to this problem. Congress must raise the debt ceiling. If we fail to do so, the consequences are hard to estimate, but could do long-standing harm.”

MilkGPT: The Treasury is a #BrokeBoy. So we need to take on more debt, to pay interest on the trillions of debt we already have.

JPOW: “The latest economic data came in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. Restoring price stability will likely require that we maintain a restrictive stance of monetary policy for some time”

MilkGPT: Everything is going well, a little too well. We need to fix this by raising interest rates again. Oh, and a lot of people are probably going to lose their jobs.

Why this matters: Interest rates have a direct impact on equities and crypto.

How did the market react? Let’s look at both the stock market and the crypto market….

  • NASDAQ: -1.89% 

  • S&P500: -1.50% 

  • BTC: -1.59%

  • ETH: -0.78%

Neither market overreacted, which means the bad news was probably already priced in.

So, what now? Well, Powell’s got two choices:

1/ Lower rates = higher growth = untamed inflation

2/ Higher rates = lower growth = tamed inflation

It’s a “doomed if you do, doomed if you don’t” situation.

Lower rates and you catch flack from the “inflation is destroying the dollar” crowd. Raise rates and get hit by the “you’re going to drive us straight into a recession” crowd.

And right now it looks like the Fed is choosing option #2. Which could mean more selfies like these in the near future…

LEARN ABOUT THE NEXT 10X IN CRYPTO AT THE CRYPTO HEDGE FUND SUMMIT

Dear Reader,

Every time the “Bitcoin Halving” takes place…

Bitcoin’s price shoots off the charts.

The first time it boomed by a staggering 1,235%.

The second time it skyrocketed 5,267%.

Last time it shot up 1,356%.

Now… its about to happen again.

The thing is, right before the “Halving”, is an accumulation period.

Guess what?

2023 is a “halving accumulation year”.

We’re bringing together 12 of the smartest hedge fund managers in crypto to tell us which coins they believe will reach record highs this year.

It’s called… The Crypto Hedge Fund Summit.

The event is free to the public… for now.

You can see if any spots are still available when you…

Click here to register for free

Regards,

Bryce Paul, Co-Host

Crypto Hedge Fund Summit

GRAPH OF THE DAY: WEEKLY CRYPTO FLOWS

The results for the latest Weekly Crypto Asset Flows report are in… outflows totaled $17M last week. That’s the 4th straight week of outflows. Ouch.

You might need a telescope to see the tiny bars on the graph, but there are 3 big takeaways:

  • Crypto is on a cold streak. Four straight weeks of outflows likely represent continued investor concerns over regulatory uncertainty.

  • Different regions have different market sentiments. The U.S. actually saw inflows totaling $7.6M, while Europe saw $23M in total outflows.

  • Bitcoin led the way in outflows with $20M. Plus, Short BTC products (people betting BTC will go down) saw a third straight week of inflows. Call it a double-whammy.

Buckle up, ladies & gents – it could be a wild ride over the next few weeks. We don’t like doing public math but…

Hawkish Powell Speech + Negative Market Sentiment = Gulp

VITALIK DUMPS SHITCOINS & NETS $700K

Vitalik Buterin is well-known around the crypto streets. He’s the Creator of Ethereum. Conqueror of Blockchain Trilemmas. Wearer of Pajamas-in-Public.

(Yes, V still gets the Game of Thrones intro. He’s one of the few remaining crypto heroes who hasn’t scammed us yet.)

And now he has a new nickname: Dumper Of Shitcoins. According to Lookonchain, Vitalik recently sold ~$700,000 worth of memecoins.

But here’s the thing: Vitalik never bought these tokens, they were sent to him for free.

This is a common tactic used to artificially create hype around a token:

  • Random projects send a BUNCH of tokens (billions or trillions) to a famous person

  • Followers see that the famous person holds the token, so they buy too

  • Price and hype goes up

🚨Watch out for this one at home, kids🚨

Shiba Inu did this too. They sent Vitalik ~50% of the ENTIRE token supply and the memecoin went viral. He ended up donating $1.2B of SHIB to a COVID relief fund and then burnt the rest. (Milky Fact: It’s estimated his SHIB holdings would’ve been worth ~$30B at their peak.)

Now, Vitalik is swapping the latest batch of shitcoins for a token he knows well, ETH. He sold so many MOPS tokens (50B) that it caused the token’s price to implode (-63%).

For Vitalik it isn’t about making big money on these projects, it’s about sending a message: stop using his name to pump projects.

P.S. – Unfortunately, it looks like one of the tokens he dumped, SHIK, actually ended up mooning and is now up over 60%.

Crypto degens gonna degen.

GRAYSCALE BATTLES THE SEC IN COURT

There’s a BIG crypto battle going down in court this week. Introducing the fighters…

In the blue corner: Grayscale – a digital asset investment firm that manages the largest Bitcoin trust ($14B) on the market.

In the red corner: The SEC – U.S. regulators that oversee securities exchanges, brokers and dealers, investment advisors, etc., to enforce the law against market manipulation.

“LET’S GET READY TO RUMBLEEEEE”

Check it out over at Milk Road News – a new offering where we’ll go deeper on specific topics on our website -> Get the full scoop on Grayscale vs. the SEC here.

WEB3 WEDNESDAY: A LOOK AT WHO’S HIRING 👀

We’re back with another episode of Web3 Wednesday – where we highlight companies building cool sh*t that are hiring.

It’s kinda like a job fair except better – there’s no awkward small talk, no dress code, and no long lines. The only line you’ll see is the dotted one on your new job offer.

Here are some of the dope positions we came across:

P.S. – Are you trying to hire in Web3? Learn how to get your open jobs in front of 250k+ crypto enthusiasts here.

MILKY MEME

Milk Road Rule #32: Don’t be like this guy…🤣🤣

That’s a wrap for today. Stay thirsty & see ya next time! If you want more, be sure to follow our Twitter (@MilkRoadDaily)

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A ROADER’S REVIEW

VITALIK PIC OF THE DAY

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.