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GM. This is Milk Road, the newsletter that’s easier to read than the top line of an optometrist’s eye chart!

Here’s what we got for you today:

• ✍️ The biggest day in crypto history

• ✍️ The chart predicting the market’s next leg up

• 🎙️ The Milk Road Show: Bitcoin Strategic Reserve Is Here + 3 Mega Trends That Will Define DeFi’s Future

• 🍪 SBF is back?

THE BIGGEST DAY IN CRYPTO HISTORY 🥲

If you read yesterday’s edition, you’ll know that any good news surrounding crypto is being dampened by market conditions…

But don’t let that fool you:

Yesterday may just be the BIGGEST day in crypto history ever!

Last night, Trump signed an executive order to do the following:

• Move any Bitcoin seized by the US government (past, present, or future) into a Strategic Bitcoin Reserve

• Stop any further selling of $BTC on the US government’s behalf

• Allow the US Treasury to create strategies to buy more $BTC (as long as it doesn’t cost the taxpayer)

• Create a general (non-Bitcoin) crypto stockpile with any existing/future seized crypto assets (note: the Treasury won’t be able to buy more of these tokens)

TL;DR: We got a Bitcoin Reserve and a general Crypto Reserve, at no cost to the taxpayer.

Did the market care? No. Quite the opposite (ear muffs – this is still monumental).

The beauty of all this is, it makes it hard for either side (pro-crypto / anti-crypto) to complain. Crypto people got what they wanted, and it ain’t costing the anti-crypto folk a dime. ✅

(Don’t get us wrong, both sides are going to complain – it’s just going to be harder for them.)

Now, there are two things we want to dig into here: 

How will the treasury acquire more Bitcoin at zero cost to the taxpayer? And the massive leap we just took in the game theory of global $BTC adoption.

1/ How will the US Treasury be able to make ‘budget-neutral’ $BTC purchases?

Short answer: if you can’t use taxpayer money, just use your own.

Long answer: the Treasury department can make budget-neutral Bitcoin purchases in a bunch of different ways, e.g:

• Revalue their gold reserves → use any increase in value as collateral to take out new loans → buy $BTC.

• Reduce the Federal Reserve’s surplus (i.e. lower the amount of spare cash they’re allowed to have) → forcing them to spend more → funnel some of that spend into $BTC.

• Sell Bitcoin bonds → take a chunk of the money earned from selling these bonds and put it into $BTC → allocate the rest to funding government operations.

The catch: these solutions (and most of the other options, outlined by Van Eck’s Matthew Siegel below) would require congressional approval – so they’re not sure-fire options. 

2/ The $BTC game theory just kicked into full gear!

The Bitcoin game theory = if the US is holding it, other countries will want to follow (so they don’t get left behind). 👇

• Brazil approved a $BTC reserve yesterday…

• The United States announced the same thing a few hours later…

• And now it’s rumored China is discussing a Bitcoin Strategic Reserve…

They all add further pressure to those on the sidelines to start buying Bitcoin – but the US has always been the 200 pound anvil that would break the camel’s back.

And last night, that anvil was dropped.

(Our thoughts and prayers are with the camel and its family at this time.)

P.S. Want more insights on:

• The US’ Bitcoin Strategic Reserve (BSR)

• Which states may soon launch their own BSRs

• Why the market is reacting poorly to all of this bullish news

We just sat down with Pantera Capital’s Mason Nystrom to talk all that and more! 

Click below to watch it now. 👇

YouTube | Spotify | Apple Podcasts

COTD: PREDICTING THE MARKET’S NEXT LEG UP 📊

Yesterday, we mentioned that the DXY (which tracks the strength of the US Dollar) recently saw a sharp decline.

…and it has only continued to fall since then.

Hell, it’s been so consistent that Kyle has created a running thread that tracks each move down (yeah, he needs a hobby).

Today, we want to zoom out and see what we can learn from the historical patterns.

(‘Cause ICYMI: a weaker dollar can often result in stronger crypto prices.)

First, cast your eyes upon this chart:

The key points here:

• This kind of decline in the DXY has only happened 3 other times in the last 12 years

• After the trailing 3 declines, we’ve seen anywhere from 5-87x returns in $BTC

• Changes in the DXY can take months to reflect in the $BTC price

Second, bundle all of that together, and read the message being relayed:

It will take time, and you shouldn’t be expecting 2015-era returns of 87x (they decrease over time, as $BTC becomes a larger and larger asset) – but if history is anything to go by, we should be due to see our next leg up in the coming months.

BOOM! 

Bitcoin Reserve announced, forward-looking indicators pointing up…

If that’s not a great way to enter the weekend, I don’t know what is!

Milk Man out. 🫡

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Jito is considering buybacks. Aave proposed it earlier this week and looks like other companies are following suit.

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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.