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GM. This is Milk Road, the newsletter that's like a USB flash drive of crypto knowledge – small, but mighty.

Here’s what we got for you today:

• WTF happened yesterday?? 👀

• Warning: crypto users are getting phished! 🚨

• Global ownership of crypto grew by 34% last year 🍪

WTF HAPPENED YESTERDAY 👀

WOW. Yesterday was a bloodbath…

• Crypto’s total market cap dropped 4.5% in a day.

• BTC was down 5%.

• ETH was down 7%.

• Many altcoins plummeted by 10% or more.

Trying to find green in the market felt like a game of “Where’s Waldo?”.

(spoiler alert: nowhere to be found)

So, what’s going on? 

1/ FTX dumped $1B+ worth of GBTC.

• According to CoinDesk, FTX’s bankruptcy estate dumped 22M shares of GBTC.

• This added ~$1B in selling pressure over the last week.

Crazy, I know. FTX collapsed back in November 2022…

14 MONTHS LATER, the market is still paying the price. 

The good news? FTX doesn’t have any GBTC left.

So, in theory, the selling pressure should calm down.

2/ Leveraged positions are getting liquidated.

When the markets get hot (like they have been over the last few months), investors get greedy. 

When investors get greedy, they open up leveraged positions. 

• Leverage can 100x your gains when prices go up.

• But leverage can 100x your pains when prices go down. 

Right now, it’s the latter…. 

Prices dropped and ~$300M in leveraged positions was liquidated over the last 24 hours. This caused prices to drop even more. 

Milk Road Rule #37: Live by the leverage, die by the leverage.

3/ U.S. stocks are getting a lot of attention right now.

Yesterday:

• The Dow Jones Industrial Average closed above 38,000 for the first time ever.

• The S&P500 hit a new all-time high. 

On top of that, it’s earnings season. And some of the biggest companies in the world are releasing their quarterly numbers this week…

Milk Road Take: With stocks pumping and multiple sell pressures happening at the same time, we expect the crypto market to be choppy in the near term. 

Be careful trading and remember, sometimes the best thing to do is… nothing. 

Pro tip: if you’re struggling to fight the urge to trade in a volatile market, there’s a game I used to play in college that might help… Edward 40 Hands. 

Here are the rules:

• Tape a 40 oz beer to each of your hands (no free hands = no crypto trading).

• You can’t untape your hands until you’re done drinking (80 oz of beer = too drunk to see straight = no trading).

Problem solved. You’re welcome.

WARNING: CRYPTO USERS ARE GETTING PHISHED 🚨

PSA: PHISHING EMAILS ARE BEING SENT AROUND TO CRYPTO USERS. 

There are multiple reports that…

• the emails appear to be coming from big-name companies like Token Terminal, Wallet Connect, and more. 

• Most of them are promoting an airdrop and ask you to connect your wallet to claim it. 

The problem: these are not real airdrops, they’re phishing links. 

Here are a few examples:

Milk Road Rule #56: if it smells phishy, it probably is. 

Remember to double quadruple-check all links.

Stay safe out there, Roaders.

BITE-SIZED COOKIES FOR THE ROAD 🍪

Global ownership of digital assets grew by 34% in 2023. The user base grew from 432 million in January to 580 million by the end of the year.

Terraform Labs filed for Chapter 11 bankruptcy. According to the press release, the move was “a strategic step that will enable it to continue its operations and support for the Terra community and ecosystem.”

Alameda Research dropped its lawsuit against Grayscale. Alameda alleged initially that Grayscale had collected $1.3 billion in management fees, violating its trust agreement.

Binance and the SEC are facing off in court. Both parties were met with questions from the judge about why certain cryptocurrencies should be considered securities and subject to the SEC's rules.

Some crypto executives believe Hong Kong could approve its first spot Bitcoin ETFs by the middle of this year. Bitcoin ETFs are like Pitbull - Mr. Worldwide. 

Kaspersky warns of a Mac exploit targeting Bitcoin and Exodus wallets. According to the cybersecurity firm, hackers are tricking users into downloading a fake, malicious version of their software.

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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.