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GM. This is Milk Road – the Mr. Miyagi to your Daniel LaRusso.

(Except we won’t make you paint our fence in order to learn).

Here’s what we got for you today:

• ✍️ A $40T market for $BTC?

• ✍️ Crypto returns are outpacing the stock market (again)

• 🥛 Milk Road PRO Portfolio updates

• 🎙️ The Milk Road Show: Missed the Last Crypto Pump? How to Get Ahead of the Next One w/ Lark Davis

• 🍪 Users can now create their own onchain AI agent

A $40T DERIVATIVES MARKET FOR $BTC? SURE, WHY NOT. 💰

Tell us if you’ve heard this story before…

In Fall of 2015 a mechanic named Terry Roetger noticed a growing number of his young customers bringing in used Mercedes Sprinter vans.

He soon discovered the Sprinter was the go-to choice for those living the ‘van life.’

Knowing that Q4 was just a few months away, and is typically when car sales peak each year, Terry went to his local second hand dealer to cut a deal. 

If the dealer could source them, Terry would buy 10 Sprinters at the average used market price of $20k.

He signed a 90 day written commitment that said if the dealer could source the vans from their partner network, he’d buy them.

(And if he didn’t front the cash, at the end of the 90 days, the deal was off).

All he needed was a 10% deposit of $20k.

Come Q4, demand was through the roof → used Sprinters spiked to $40k a piece → Terry took a loan against his business ($180k + deposit) → bought the fleet → resold them for $400k total.

The best bit? If Q4 came around and the demand wasn’t there, Terry could’ve terminated the agreement by not paying → losing his deposit → but saving himself from going into debt. 

(And the dealers would’ve just transferred the fleet back to their partner dealership at no cost).

Now, if you’ve never heard this story – it’s ‘cause we just made it up.

You’ve just been Miyagi’d into learning about options trading.

With options trading, investors can buy the ‘option’ to purchase an asset at a certain price, at a certain date in the future. 

If the date rolls around and they don’t want to buy the asset, they don’t have to (all they’d lose is what it cost them to buy the options).

The crazy part? Derivatives markets (which are made up of financial products like options) tend to trade at 10-20x the size of the underlying asset.👇

E.g. If the underlying assets are worth $1B, its derivatives market would be worth $10B-$20B! Which means there’s a potential of that $10B-$20B being used to buy or sell the asset.

(More trading volume tends to attract more investors → which can lead to higher prices over time).

In fact, many BIG TradFi investors won’t buy an asset if it doesn’t have a derivatives market (if they can’t hedge their bets, they don’t want to touch it).

Now…guess what just got added to the Bitcoin ETFs? Options baaaaby!

This is a bigger deal than it seems, because right now, most Bitcoin derivatives exist only on centralized crypto exchanges (which institutional investors tend not to mess with).

If this options market can help build a Bitcoin derivatives market that’s 20x $BTC’s current market cap, it would be counts on fingers ~$40T!

$40T worth of potential trading volume for Bitcoin? 

Sure, why not!

CRYPTO RETURNS ARE OUTPACING THE STOCK MARKET ONCE AGAIN! 📈

Alright, time for some retrospective learning! 

A few months ago we wrote about a divergence in stock and crypto prices that occurred between April and September.

(Stocks went up, while crypto trended down). 👇

And with this, came an opportunity…

‘Cause here’s the thing – divergences often correct themselves over time. 

And for this divergence to be corrected, there were two basic options:

1. The stock market had to fall to meet the price of crypto

2. The crypto market had to rise to meet the price of stocks

The opportunity: figure out which option is most likely, and bet on it.

…had you have looked at the calendar → seen there was a rate cut expected in late September → a presidential election not long after that → seen that a wave of liquidity (fresh cash) was already entering the market → and bet on option #2?

You’d be smiling right now! 

‘Cause the chart now looks like this. 👇

The lesson? Divergences in correlated assets = opportunity.

Ok, ok, we know – that’s all easier said than done!

Knowing which market (stocks vs. crypto) is either going to increase or decrease is no simple task – and honestly, most of our team don’t know how to navigate this sort of thing.

But that’s why we employ a bunch of nerds (the PRO team) to do our homework for us.

They called the recent price bottom for the crypto market within two weeks of it actually happening.

(And provided us/our PRO members with an easy-to-track cycle chart that indicated crypto was likely about to increase to meet the stock market).

Praise be to our beloved nerds 🙏

MILK ROAD PRO PORTFOLIO UPDATES 📊

Is the Milk Man about to walk into Thanksgiving next week with a grin on his face and green portfolio?

Like clock-work, every Tuesday, we’re here to share our updated list of investments from the Milk Road PRO Portfolio. 

Disclosure: We are not a day trading portfolio so don’t expect a high volume of trades. Read our “how to build a crypto portfolio in 2024” report to learn more about our portfolio strategy.

Portfolio performance 📈 

The Milk Road PRO Portfolio saw a slight increase over the past 7 days. Our portfolio value is at $125.8K, up 3.59% since last week.

A pretty solid week - another one ending with a green candle. 

Some bears are starting to get more vocal again, but we can’t let them mess with our mindset. Now is our time to chill, stay focused, and enjoy the compounding effects in the banana zone. 🍌

Portfolio changes 👀

BITE-SIZED COOKIES FOR THE ROAD 🍪

Emergence, The Block’s debut conference, is taking place in the stunning city of Prague. A conference in early December, followed by a winter getaway in Europe—sounds like a dream, doesn’t it?*

Sky’s $USDS launches on Solana. Formerly known an $DAI, $USDS is the third largest stablecoin by market cap. Looks like Solana maxis will have more to flex about now.

Metaplanet buys a big chunk of $BTC (again). If only I could bet on Metaplanet and Microstrategy buying Bitcoin—I’d be a millionaire by now.

Users can now create their own onchain AI agent. Crypto is suddenly obsessed with AI agents showing no signs of it slowing down.

Hacken’s latest Flash Pool sold out in 9 minutes, but more 30-day pools that are offering real yield are coming soon. To date, there are 7 pools and over 4 million $HAI staked, that is offering, on average, APYs of 120% and a 26K $HAI staked per user.*

*this is sponsored content and not financial advice

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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.