🥛 Dude, where's all the Bitcoin?

GM. This is the Milk Road, we’re that friend in the group that tries the food first to see how spicy it is, just to make sure you don’t burn your taste buds off.

Siri, what’s going been going on in crypto lately?

Estimated read time: 2 minutes and 19 seconds

• 🧐 What happened to Luna's $3B worth of Bitcoin?

• 🇸🇻 El Salvador tries to convince more countries to hold BTC

• 🚀 Coinbase's new launch

MILKBUSTERS: WHAT HAPPENED TO LUNA'S $3B OF BITCOIN?

We’re back again for another take of The Milkbusters, where we dive into and answer some of the toughest questions and get you answers.

Today we’re talking about what's been on everyone's mind for the last week…

What happened to the $3B worth of Bitcoin that the Luna Foundation Guard (LFG) had in reserves? 

LFG had set up a reserve fund with billions in crypto assets as a back-up plan in case their stablecoin UST ever lost its stability. It was their “foolproof,” rainy day fund if shit ever hit the fan. 

The reserve hit an all-time high of $4B on May 3rd. A few days later, The Great Depegging of 2022 began, and UST + Luna started to crash. 

Then people started noticing that LFG had transferred out the remaining BTC from their wallet... 

No announcements, no heads up, no explanation. Nothing. But we could clearly see that the funds had moved. So where did they go? What happened? Was it all sold? How much was left? 

It wasn’t until yesterday that the Luna Foundation Guard gave us a little more info on what actually went down.

Let’s look at the timeline:

May 7: Reserve is sitting pretty with ~$3.2B in crypto assets. 

May 8: UST begins to depeg, LFG starts selling their reserve assets to buy more UST and try to regain the peg. A total of ~$1.8B was sold

May 9: Take a breather

May 10: UST falls to below $0.75. LFG now executes their “last-ditch effort” play and sells 33,206 BTC (~$1B at the time) to try to save the peg

May 12: With little to no bitcoin left, they decide to swap their UST for LUNA and stake it across multiple protocols to protect against more governance attacks. This money is now stuck in the protocols for the next month.

Fast forward to today and this is what they have left:  A little over $187M in assets.

The Milk Road’s Take: That’s how you go from $3.2B to $180M in 6 days. 

A lot of people expected more sell pressure here, so maybe it’s a good thing in the short-term all the BTC has been sold and has been holding up around $30k so far

EL SALVADOR HOSTS 44 OTHER COUNTRIES TO TALK ABOUT BITCOIN

Delegates from 44 countries met in El Salvador yesterday to talk about Bitcoin.

Flashback to July 1944, where delegates from 44 countries met together at the Bretton Woods Conference to talk about international economic cooperation. They would go on to create the International Monetary Fund (IMF) and the World Bank. 

Is history repeating itself? A new world bank probably won’t come from this, but it is one step closer to getting more countries to adopt bitcoin.

El Salvador was the first and it’s all thanks to the president, Nayib Bukele. He loves Bitcoin, and doesn’t hide it. 

From tweeting about buying Bitcoin on his phone while taking a shit, to being the headliner for Bitcoin Miami 2022 (unfortunately couldn’t make it), El Presidente has put on quite a show. 

Now he’s doing his best Nick Saban impersonation and trying to recruit other countries to join the Bitcoin gang.

Some of the countries invited include: Paraguay, Egypt, Nigeria, Ecuador, Costa Rica, Ghana, Madagascar (I was today years old when I learned Madagascar has a population of ~28M people), etc.

There’s only one bad thing, his plan hasn’t worked quite as well as he wanted so far:

• 61% of citizens stopped using Chivo, the national crypto wallet, after withdrawing the $30 sign up incentive

• El Salvador's Bitcoin investment is down ~$30M. No bueno

• They are struggling with their volcano bonds, are in huge debt and are in danger of defaulting on their next debt payment

The Milk Road's Take: It’s tough being an early adopter of technology, especially something like crypto, so it’s no surprise to see that El Presidente's plan hasn’t exactly played out the way he’s wanted it to.

But he might be right about one thing: there will be more than two countries that adopt bitcoin as a legal tender this year. 

We’ve already seen the Central African Republic join the club, and with 44 different countries meeting yesterday to talk about Bitcoin we wouldn’t be surprised to see one more joining soon. 

COINBASE LAUNCHES SOMETHING NEW

Coinbase announced they are releasing some new features to help onboard new users into Web3. 

Today, most people who own tokens only interact with crypto via a centralized exchange like Coinbase.

Why? Because it’s easy to use and safe - it isn’t some random site that could drain their entire wallet.

Coinbase’s new products are looking to change that. You can do the following, all without leaving the Coinbase app:

• Buy NFTs on other marketplaces like OpenSea (you can pay using fiat)

• Trade crypto on decentralized exchanges like Uniswap and Sushiswap

• Borrow and lend your crypto with platforms like Curve and Compound

The new features will be rolled out to 1% of U.S Android users first, with plans to release them to the general public soon. 

Coinbase has been on a roll, releasing back-to-back products over the last few days. They just released Coinbase Pay and now this. Both products have the potential to easily onboard the next 1M users into web3, it just comes down to execution. 

The Milk Road's Take: This could be a huge game changer. If new users can easily access dApps without leaving the warm, safe feeling of Coinbase…that’s a huge boost in the potential growth for Web3 adoption. 

If this works out, it will more than make up for their Coinbase NFT fumble, which launched a month ago and currently only has ~2,300 users.  

Coinbase out here trying to make me buy stocks 🤤

TODAY'S MILK ROAD IS BROUGHT TO YOU BY SORARE

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Everyone knows about fantasy sports leagues. Either you’re in a league or you have a friend who’s in a league and follows every player on a week-to-week basis.

After all, the fantasy sports industry has been booming and is expected to reach ~$50B by 2027.

What Sorare does differently is they let you purchase officially licensed NFT digital cards for your favorite players.

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SAnd Sorare just announced that they're launching MLB soon and you can sign up here to be notified when it's live!

BITE-SIZED COOKIES

The latest weekly digital asset funds report is in: Institutional funds invested $274M into crypto assets over the last week. The most $$ invested in a single week all year long! Looks like institutional investors are loving the dip.  

Another stablecoin, another DEI (day) of chaos. This time DEI, the stablecoin for Deus, lost its peg and dropped to as low as $0.66.

S&P Global is looking to create a new DeFi strategy group. The goal is to help build the company’s decentralized market framework for investors. 

Coinsource partners with Kwik Trip gas stations to stand up 800 new Bitcoin ATMs. States include Wisconsin, Minnesota, Illinois, and Iowa. 

Crown Royal, the whiskey brand, has filed for trademarks that cover NFTs, virtual non-alcoholic and alcoholic drinks, and virtual clothing. Looks like the metaverse won’t be short on any virtual whiskey.

Shaan aka “Elon’s chocolate milk” & Ben "2% Milk" Levy

See ya tomorrow!

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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.