🥛 Milk Road Portfolio Update - We're rich?

GM. This is the Milk Road, we read everything on the internet, so that you don’t have to.

Today’s estimated read time: 3 minutes and 19 seconds

Prices held all weekend long and so did the fear and greed index.  

Here’s what you missed this weekend in crypto:

• 💰 Milk Road Q1 Portfolio Update

• 🎥 A Netflix doc you need to see

• 🐧 The newest NFT acquisition

THE ROAD FROM $1M TO $10M 

I have 3 goals for this year: 

1. Lose 15 pounds

2. Turn a $1M crypto wallet into a $10M crypto wallet with good investing (check out our edition where we talk all about it )

3. Learn a super-basic-dance-move that I can fall back on anytime I’m stuck awkwardly on a dance floor

So here’s an update on my super-basic-dance-move. Wait nvm. I think you guys wanna hear about the portfolio. 

How much have we made?

The first quarter is over and our $1.035M is now worth…$1.31m (+30%).

This gain came from our investment in Luna (we bought $200K at an avg. buy in price ~$40) 

Overall, $300K in 3 months (30% lift) is good, but we’re trying to 10X the portfolio, so we’ll need to get more aggressive soon.

Portfolio Snapshot

This is how we started. $1.035M in. 

We only made 1 significant trade (swapping 76 ETH for a Cryptopunk). And so far that’s not doing very well (worth 68.5Eth, -10%) 

Our total portfolio (3 assets) is currently worth: $1.31M (+30%)

What was our strategy? 

To be honest, launching the Milk Road and writing this f*cker every morning took up most of our time to start the year, so we weren’t very active. 

The one high conviction bet we made (Luna) has paid off big so far, up 183% in just a few months. 

The majority was not meant to be held in ETH (that’s just what we bought to get our initial chips) but ETH price crashed almost immediately by 30%+ so we just held on rather than sell at that low price. That kind of paralyzed us temporarily. 

Now that Milk Road is chugging strong, and ETH price has stabilized, we can start to make more moves.

Here’s our 8 Rules of The Road: 

1/ We are investors, not traders. 

2/ We want to take a few (1-4) concentrated bets that we think can 10X-100X+ in the next couple years

3/ We're measuring our performance against just holding ETH.  In this case, ETH was down 10% this quarter, while our overall performance was up 30%.  

4/ Put 10-15% of the portfolio into “degen” mode. If you don’t know what “degen” means, it’s crypto slang for “degenerate.” It basically means you just buy random shit, without much diligence, because it seems fun or interesting and it’s high risk/ high reward.

5/ Get ideas by talking to really smart people, then do our own research 

6/ Don’t get stressed out by it

7/ Don’t get hacked

8/ If we bet, make sure we have real conviction. Don’t just “eat because you’re bored”. Only eat if you’re actually hungry.

Heading into the second quarter, we’re gonna make some changes to our strategy:

We’re going to set up our ETH to earn yield 

We’re going to take a small borrow position against our ETH (leverage). Not so much that we worry about getting liquidated daily, but enough to give us more ammo to play with. 

We’re going to allocate 30 ETH to place more aggressive bets this quarter.  We’re gonna call these “hero ball bets.”  Either they’re gonna win us the game or we’re going down shooting

We’re going to keep hunting for our next big concentrated bet (like Luna), but not get impatient

We’re gonna let you see everything we do, but remember this is the farthest thing from financial advice. This is us playing with money we can afford to lose, not advice we think anyone else should follow. 

SKIP ROTTEN TOMATOES, I'VE GOT A MOVIE RECOMMENDATION FOR YOU

I watched “Trust No One: The Hunt for the Crypto King” on Netflix. It’s great. You should watch it. 

I won’t spoil it, but here’s the big idea: 

Back in ~2015, the biggest crypto exchange in Canada was called QuadrigaCX. 

Hundreds of thousands of people used it…then suddenly, the site shut down. Over $200M worth of crypto vanished. Why?

Because the founder of the exchange suddenly died in India, and he was the only one who knew the private keys that held customers crypto. 

Customers were outraged. Their funds were gone, and this story sounded sketchy…so a group of them got together in a group chat and started investigating the situation. Did the founder really die? Or did he fake his own death and run away with the money?

It’s a good one, go watch it. Or if you want the podcast version, listen to Exit Scam on the same story. 

TAX SEASON IS HERE, SO WE PARTNERED WITH CRYPTOTRADER.TAX TO GET YOU THE INFO YOU NEED.

Taxes are due in two weeks...and idk about you, but I have 3 full days blocked off to finish my taxes.

Crypto taxes are one of the most confusing things out there…but this is Milk Road, so you know we got you covered.

Let’s start with the basics:

A big part of crypto taxes is recognizing taxable events.  A taxable event is a scenario in which you incur a tax liability. Common taxable events within crypto include selling crypto for fiat, trading your cryptocurrency for other cryptocurrencies, and buying goods or services with crypto.

Every time there is a taxable event, you have to pay capital gains tax.

While that sounds like a lot (trust us, it is).

The good news is not everything is a taxable event…including these things:

Buying crypto with fiat (e.g BTC for USD)

HODLing crypto

Transferring coins from one wallet or exchange to another 

Gifting crypto (under 15K per person per year)

Donating crypto to a 501(c)(3) nonprofit organization

Now that we got that out of the way...

Did you buy or sell NFTs in 2021? CryptoTrader.tax (soon to be CoinLedger) just released a new product that lets you connect your Ethereum address and calculate how much you owe in taxes in under 5 minutes.

You can save yourself hours of work and get 20% off at checkout right now using code: MILK.

SOMEONE "ACQUIRES" AN NFT PROJECT FOR $2.5M

You hear about people buying one NFT from a collection. Well this is different. 

Someone just bought a full NFT project for $2.5M over the weekend. This means they own the royalties & control the creative direction of the project. 

The buyer, Luca Netz, plays pro soccer in Germany.  He said he bought it because he wanted to “save” the project after the creators couldn’t execute on the roadmap.

The project did 200 eth in royalties in the last 30 days ($700,000 at current prices)...so if that holds, it’ll only take him 3.5 months to pay back his investment and then it’s all upside from there.

The Milk Road’s take:  Since these projects have such insanely high margins, buying them is a bet on being able to build hype again.  We’ll start to see more and more people betting they can do just that.

QUICK HITTERS

Congress members invite Jack Dorsey to talk about bitcoin. The main topics covered were its potential use for money laundering, the energy consumption and limited circulation as a means of payment. Check the TL;DR here 

A new $8.32M NFT-backed loan has been taken out against a basket of CryptoPunks. If people can borrow against NFT art, they are going to be way less likely to sell (drives prices up in the macro picture). 

PrimeBlock, a crypto mining company, plans to go public via $1.25B SPAC. The company  did $24M in revenue in Q4 of last year. Sounds a little weak for a $1B+ valuation… I’m not buying. 

RareMint launches their new NFT marketplace with a 1/1 Michael Jordan game worn jersey and a Lou Gehrig home run ball signed by him + Babe Ruth.

Citi Bank dropped a new report “Metaverse and Money” that predicts the metaverse economy could be worth $13T by 2030 and total users could reach 5B.  Read it in full here

See ya tomorrow!

Shaan "Chocolate Milk" Puri and Ben "2% Milk" Levy

Reviews from the Road:

Warm...say it louder for the people in the back

Getting warmer...

Ahhh there it is...you caught us

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