GM. This is Milk Road, your daily slice of the crypto pie - always fresh, never stale.

Here’s what we got for you today:

• 2 reasons a “Bitcoin Billionaire” thinks a crash is coming…🧐

• We’re giving away $500 in prizes 💰

• Graph of the day: 2024 is off to a hot start! 📊

• 10K vendors around the world accept BTC 🤑

• Gary Gensler tweets about crypto 👀

2 REASONS A “BITCOIN BILLIONAIRE” THINKS A CRASH IS COMING 🧐

Life is good in the crypto hood right now. 

Prices are green. Morale is flying high. Even the skeptics are peeking over the fence to see what’s going on…

My Uncle Vinny (aka Mr. I-Wouldn’t-Touch-Bitcoin-With-A-10-Foot-Pole) called me yesterday asking about this “ETF thing” he keeps hearing about.

It feels great to be back on top. 

But be warned, this is when you need to be the most careful. Or else you’ll get infected with NGUS - Number Go Up Syndrome. 

This is when you get so blinded by prices, you start ignoring the counterarguments… 

Well, check it out.

Arthur Hayes (one of the youngest “Bitcoin Billionaires” ever) dropped a new blog post highlighting his bear case over the next few months. 

He talks about interest rate hikes, the chilling effects on the banking sector, and a whole lot of macroeconomic mumbo jumbo that would make your Econ 101 professor proud. 

Here are his predictions: 

• Bitcoin will pump in the near term (mainly from ETF news).

• But, there will be a 30% to 40% downturn by early March.

His logic? A few big events are happening at the same time…

1/ The Federal Reserve’s Reverse Repo Program (RRP) balance is decreasing.

The RRP lets banks and investment firms park cash at the Fed to earn interest. 

Over the last few months, it’s been a big source of liquidity for markets. Investors withdraw funds from the RRP and dump them into other assets - like stocks, bonds, and crypto. 

But the RRP balance is dwindling. And without a new source of dollar liquidity… stocks, bonds, and crypto will bleed.

Hayes estimates the RRP balance could get “close to zero” by March. 

2/ The Bank Term Funding Program (BTFP) is set to expire on March 12.

U.S. banks were falling like dominos last year… 

To control the crisis, the Federal Reserve created the BTFP and offered one-year loans to banks and institutions. 

Well, the clock is ticking and the one-year program is set to expire in mid-March. 

To make matters worse, Hayes predicts the Fed won’t renew the program. Meaning the banks will need to cough up money (they don’t have) to repay the loans somehow.

As a result, many of them will go bankrupt. 

Milk Road Take: Arthur Hayes is a smart dude. He’s been running miles around the crypto track while most of us are still figuring out how to tie our shoelaces...

And while there are a bunch of people in crypto who just want to hear “rah-rah-yay-everything going up”... not us.

It’s important to hear both sides of the argument.

GRAPH OF THE DAY: DIGITAL ASSET FUNDS SAW $151M IN INFLOWS 📊

2024 is off to a hot start! 

According to CoinShare’s latest report, digital asset investment products saw $151M in total inflows last week. 

Here’s everything you need to know:

• BTC saw the majority of inflows ($113M). 

• Blockchain equities saw $24M of inflows.

• ETH saw $29M in total inflows, bringing its 9-week streak of inflows to a total of $215M.

• (Surprisingly) Solana saw $5.3M in outflows. Not the start you want.

• Other altcoins like Cardano, Avalanche, and Litecoin saw minor inflows. 

• 55% of inflows were from U.S. entities (even though a spot Bitcoin ETF hasn’t even launched yet).

Milk Road Prediction: If a spot Bitcoin ETF does get approved this week, CoinShares might need to adjust its graph because I don’t think all the inflows will fit.

10K VENDORS AROUND THE WORLD ACCEPT BTC 🤑

According to BTC Map, ~10,000 vendors around the world accept Bitcoin as a payment method.

This is up from ~8,600 a year ago. (Hell yeah!)

Why this matters: One of the biggest arguments against crypto right now is, “I can’t use it in the real world.” 

And it’s true. I can’t walk into 7-Eleven to buy a Slurpee (blue, of course) using BTC. 

But as more and more vendors open up to the idea of BTC and begin accepting it as a payment method, the closer we can get to true mass adoption. 

BITE-SIZED COOKIES FOR THE ROAD 🍪

Gary Gensler tweeted a thread about investing in crypto assets. I don’t know what’s crazier - the fact he actually tweeted it or the fact it already has 25 MILLION views. (!!)

Spot Bitcoin ETFs could bring $50B - $100B of inflows in 2024. According to Standard Chartered Bank’s estimates, the price of BTC could also rise to $200,000 by the end of 2025.

VanEck and Bitwise are prepping over $200M in advance of spot Bitcoin ETF approvals. With Bitcoin spot ETFs imminent, the financial firms are poised to inject millions into the new investment products.

Someone sent $1.2 million to the Genesis wallet mined by Satoshi Nakamoto. The Genesis wallet now has a balance of almost 100 bitcoin.

More than 1 million smart accounts have been deployed. According to Alchemy, an estimated 53% of the total smart accounts deployed were created in Q4 of 2023.

MILKY MEMES 🤣

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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.