GM. This is Milk Road, the daily newsletter that's the good kind of nosy, always up in the market’s business.
Here’s what we’ve got for you today:
- ✍️ The market that won't break.
- 🎙️ The Milk Road Show: Wall Street Is Locked and Loaded on Crypto… It’s Not If, It’s When.
- 🍪 The CLARITY Act is in a zombie state.
Prices as of 2:00 p.m. ET. Powered by CoinGecko.
THE MARKET THAT WON'T BREAK (UP OR DOWN) 🤷♂️
This morning was weird.
I got on our weekly ‘what we’re watching’ call and realized I had nothing to ask John.
Usually I turn up with a list. This time, every question I had would've gotten the same answer it got in March.
Bitcoin’s around $63K… Ethereum pinned around $1,900… Solana in the low 70’s…
It’s been like this for ~6 months now. What gives??
"The bears can't break the bulls and the bulls can't even mount a rally," John said. "It's weak sauce in both directions."
Bad news has been hitting… but having little-to-no effect:
- The Senate went into recess without voting on the CLARITY Act…
- Tech sold off when the AI trade briefly unwound a few weeks back…
- Strategy has been selling BTC below cost price to fund dividends…
This time last year, any one of those headlines would have shaved 20% off the market.
This time, hardly a wobble.
My worry is that if bad news can't move this thing along, good news might not either.
Everyone who wanted out is likely already out (stemming the sell pressure), but at the same time, there aren't any buyers to push things up.
The good news is, the economy underneath all this is accelerating…
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THE MARKET THAT WON'T BREAK (UP OR DOWN) P2 🤷♂️
The traditional driver of risk assets is waking up.
The ISM manufacturing index, a monthly survey of factory purchasing managers, just hit 55.6 (and anything above 50 = economic growth, which typically = growth in risk assets, like crypto).
We’ve now had seven straight months of expansion, with July marking the strongest levels since May 2022.
So if the ISM is up, which has traditionally pushed crypto up, why’re we flat??
Short answer: there's a speculative bull market on, but the money is piling into AI instead of crypto.
Bitcoin got its bull market, topped out mid-range without hitting ‘full euphoria,’ and the liquidity (fresh cash) that usually finds its way into alts went to Nvidia's customer base instead.
So what narratives could bring some of the spotlight back to crypto?
The two main candidates for us:
1. Agents paying agents.
Cloudflare says bots overtook humans on the web in June, and its CFO thinks machine traffic could outnumber us 1,000 to 1 within five years.
Card rails that take 30 days to settle and charge $0.30 per transaction aren’t going to work for high volume, sub-cent microtransactions.
2. The tokenization of everything.
Around $340B of traditional assets sit onchain today, and Standard Chartered's Geoff Kendrick sees $4T by the end of 2028.
The product pitch that will drive this adoption: low-to-no-fee trading, on all assets, anywhere in the world, 24hrs a day.
But all of the above could take a minute to arrive, luckily, if you’re impatient (like me), we have this in the near term:
On Wednesday, Trump is hosting crypto and AI executives at the White House, and John is guessing/hoping a part of the meeting will be dedicated to getting the CLARITY Act the support it needs to pass in September.
Prediction markets currently give the bill 20% odds of passing this year, down from 82% in February.
John’s internal prediction market (his brain) gives it closer to 75% odds of passing.
If he’s right, the market could be in for one helluva surprise when the Senate returns September 14.
Fingers/toes/eyes crossed he’s right!
BITE-SIZED COOKIES FOR THE ROAD 🍪
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Scott Melker: There's no more dangerous belief in investing than thinking you'll sell now and buy back lower.
Saylor: "There's a 2% property tax on houses in Florida… if you buy a house, you pay 2% of the value every year." Every 36 years, you've paid the full cost of the house in tax.
Matt Hougan: The CLARITY Act is in a zombie state - and it might stay that way forever.
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