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GM. This is Milk Road, the newsletter that peels back crypto’s layer like an onion - let us do the crying for you.

Here’s what we got for you today:

• BTC is going up, up, and away 📈

• The Dencun upgrade is coming 🍪

BTC IS GOING UP, UP, AND AWAY

This week’s crypto rally reminds me of one of my favorite scenes from Family Guy. Hear me out…

• In the episode, Peter Griffin (i.e. the main character) goes to a baseball game. 

• Every time he has his back to the game, someone scores. 

• But every time he turns around to watch, nothing big is happening. 

Right now, crypto feels the same way. BTC started the week at $52K. 

Two days later… it’s at $61K. 

Just in case you blinked and missed something, here are 4 graphs to help explain what’s going on:

1/ ETF issuers are buying up 10x more BTC than miners are producing.

This is a common trend we’ve been seeing since the Bitcoin ETFs launched last month. 

Yesterday, it happened again…

Why this matters: I got a “C-” in economics (C’s get degrees!) but even I know that when the demand for an asset is 10x the supply being produced… there’s a demand shock and prices shoot up. 

We’ll see how long the trend continues. 

2/ Gold is losing its shine, while Bitcoin is in its prime.

Check it out… Bitcoin ETFs are catching up to Gold ETFs. 

• Gold ETFs currently hold ~$92B.

• Bitcoin ETFs currently hold ~$40.7B.

P.S. - According to Bloomberg analysts, there’s a good chance Bitcoin ETFs pass Gold ETFs in assets under management (AUM) within 2 years. 

3/ Fidelity upped its BTC allocation.

A few weeks ago, Fidelity added a small allocation (1%) of one of its funds to invest in BTC. 

• It’s a fund dedicated to “conservative” investments. AKA boring assets that get your grandparents excited. 

• It includes stuff like investment-grade debt, U.S. equities, international equities, etc.

Well, fast forward to today, Fidelity has added exposure to crypto across multiple funds…

The best part? Fidelity increased its allocation from 1% → 3% for some of those funds. 

Slowly, but surely, exposure to BTC is being normalized. 

4/ Short Gamma could lead to another BTC rally

Back in late October/early November, BTC jumped like 30% within a few weeks. (Sound familiar?)

That’s when I first learned about “short gamma”. We talked about it here, but here’s the TLDR:

• Investors can buy/sell options contracts for an asset (i.e. Bitcoin) whenever they want.

• Whenever that happens, market makers (aka the entities that offer options contracts) take the opposite side of investors' trades to maintain a market-neutral portfolio.

• This is called “gamma hedging” and market makers do this by buying/selling the underlying asset (i.e. BTC) as prices move.

This means that as prices go higher, market makers need to buy more BTC to hedge and maintain a market-neutral position. 

Sometimes this leads to a “gamma squeeze”. It looks like this… 

Prices go up → market makers need to buy BTC → pushing prices higher → forcing market makers to buy more BTC → pushing prices even higher → leading to a happy Milk Man. 

Well, according to a few experts, it looks like a gamma squeeze could be happening…

To quickly summarize everything going on:

• BTC is going through a demand shock. 

• BTC ETFs are catching up to Gold ETFs. 

• Trillion-dollar asset managers (like Fidelity) are allocating 1-3% of funds to crypto.

• A gamma squeeze could push prices higher.

Buckle up, folks. We’re in for a ride.

BITE-SIZED COOKIES FOR THE ROAD 🍪

How Airdrops Work and Where To Find Airdrops. Check out the Milk Road guide to earning free tokens and an explanation of how they work. Who doesn’t like free stuff right? 

The Ethereum Foundation announced the Dencun network upgrade has been “successfully activated on all testnets.” Next up? Activating the upgrade on the main network. This is scheduled for March 13. 

Kraken launched a new platform targeted at institutional investors. The ​​services include using Kraken’s spot exchange, derivatives trading, qualified custody, and indices. 

Telegram says it will start sharing ad revenue with users starting in March. All payments and withdrawals will be settled on the TON blockchain, a network created by the company that built Telegram.

Strike is rolling out its payment services in Africa. The services will be expanded into Gabon, Ivory Coast, Malawi, Nigeria, South Africa, Uganda, and Zambia - with more African markets to come in the future.

The “Newborn Nine” Bitcoin ETFs now hold 300,000 BTC (worth $17B). By the way, that’s about 1.5% of the current BTC supply.

VanEck launched a new NFT marketplace and digital assets platform called SegMint. VanEck was one of the first to apply for a spot Bitcoin ETF and now it’s one of the first to launch its own NFT marketplace.

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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.