🥛 The questions we ask when the market punches us in the gut

GM. This is the Milk Road, we hold your hand and look both ways while you cross the streets of crypto.

Estimated read time: 2 minutes and 49 seconds

• 🥊 We just got punched in the gut

• 😔 A stablecoin briefly loses its peg

• 🍪 Bite-sized cookies

• 🤣 Meme of the Day

WE JUST GOT PUNCHED IN THE GUT

Ethereum is now down 50% from its all-time high of $4,891 in mid-November and Bitcoin is now down 51% from it’s all-time high of $68,990.

So, it’s safe to say we’re officially in a bear market.

I started investing in crypto in 2013, so I’ve seen at least 3 brutal crypto down cycles (maybe more than 3. I tend to black out when it happens)

Each time, the market went down 50-80% the 52 week high, and it was doom and gloom everywhere.

But the market prices are not connected (in the short term) to the fundamentals.

Over the past 5 years:

• Ethereum protocol annual revenue has 192Xed in the past 5 years: from $50m in 2017 to $9.6b in 2021

• Metamask wallets have 3,000xed in the past 5 years: from 10k users in March 2017 to 30m now

• NFT sales volume on Opensea has 28,000Xed in the past 5 years: from $500k in 2018 to $14b in 2021

During down cycles, here are the questions I ask myself:

#1 - Did my belief change? Or just the price?

For example: Bitcoin is a once in a lifetime invention. It is a new money that does 3 things well:

1. There’s no inflation. (Because no government or corporation controls it)

2. It is programmable (smart contracts)

3. It is better in nearly every dimension than gold (easier to transport, divide, etc)

That’s still true whether Bitcoin is at $50k or $30k.

#2 - Am I a tourist? Or a Local?

Tourists leave when the weather gets bad. Locals know that seasons change, and know how to live with the weather cycles.

#3 - Is it crashing? Or is everything on sale?

When prices go up, we wish we bought more when they were low.

Then prices go down, and we sit on our hands, too scared to buy.

I had a professor in college who was retired by the age of 35.

I asked her how she retired young, and she said she got lucky because she was able to buy tons of great assets “on sale” for 50-80% off. First was during the dot com crash, she picked up the surviving tech stocks on the cheap (amazon, ebay etc.). Then in the 2008-2009 housing crash, she bought tons of real estate for 80% off.

I’m pretty young in my investing life, but have seen 1 recession, 2 flash crashes, and 2 crypto winters (2014 and 2018) where the market stayed down 1-2 years. Those questions have helped me manage my mental game during the down times.

So, while nobody knows how long the prices will stay down for, I’m gonna maintain being long.

Today, ask yourself those 3 questions and hit reply with your answers... I'll even personally pick a few people to reply to.

LUNA'S STABLECOIN DEPEGS

UST, the stablecoin for Luna, briefly lost its peg to the dollar over the weekend.

It went from $1 per token to $0.985 when someone sold off $300m worth of UST.

As soon as that happened, everyone freaked out because the whole point of a stablecoin is to be….um, stable.

People started withdrawing their money, but the market quickly corrected and brought UST back to $1.

The fact that it depegged even slightly scared a ton of people sh*tless.

The project's founder, Do Kwon, responded to the haters immediately after with this haymaker:

We're watching this because we believe in stablecoins, they let us spend without taxes & volatility and we made a damn big bet on LUNA just a few months ago

TODAY'S MILK ROAD IS BROUGHT TO YOU BY SORARE ⚽

Sorare is where NFTs meet fantasy soccer.

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. Build your squad, set your lineup each week and win rewards for how well your team does.

Sorare is partnered with over 240 clubs so you can pick up your favorite players like Messi, Mbappe, Neymar, and more.

Get started here to start dominating the Sorare leagues!

BITE-SIZED COOKIES

Former Billboards exec leaves to become CEO for Doodles. Julian Holguin is the latest exec to enter the crypto space to help NFT projects figure out what to do.

WordPress and Dogecoin partner up to create a plugin to allow dogecoin payments. About 455M websites can accept $DOGE payments now. That’s actually pretty cool.

NFTs are coming to the Gram. Instagram is rolling out a pilot that lets you connect your crypto wallet, validate ownership, and showcase your collection.

CafeDAO opens up its coffee shop over the weekend in Seattle. This is one of the first brick-and-mortar shops being run by a DAO. Think of a decentralized Starbucks - “The Cafe Everyone Owns”

Google Cloud forms a new blockchain support team. They’re gonna provide support and make their cloud platform the go-to for developers.

MEME OF THE DAY

We’ll always be there for a GM when you need it…

See ya tomorrow!

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

A Review from the Road...

What'd you think of today's email?

• 🥛🥛🥛🥛🥛 F**king great

• 🥛🥛🥛 Meh, do better

• 🥛 You didn't bring the heat

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.