🥛The state of crypto: 2 big investors weigh in

GM. This is the Milk Road, the newsletter that brings you hot & fresh crypto news each day. We give you the same feeling as when the Krispy Kreme sign is on.

“Hey Siri, what’s going on in crypto today?”

• The 2 questions on everyone's mind during crypto winter

• Axie Infinity finally makes its return

• DAO of the month

• Trivia of the day

THE 2 QUESTIONS ON EVERYONE'S MIND DURING CRYPTO WINTER

This crypto winter has been rough so far.

But in times like these, veteran crypto investors are chuckling at these 70% losses because they’ve lived through this, and worse.

First-time investors are sweating like when your teacher asks you to present your book report to the class, but you never opened the book.

Whether you’re a vet or new to crypto, there’s always two questions that creep into everyone’s minds:

1/ Is crypto really the next big thing or was it just hype?

2/ How long will the pain last?

Today we’re gonna answer both.

To answer the first question, we’re gonna get some help from Chris Dixon.

Chris is:

• Head of A16Z’s crypto funds (~$7b in those funds)

• An OG internet investor

• Someone who opens the Milk Road every day…what up Chris!

He recently wrote a blog post titled: Toys, Secrets, and Cycles: Lessons from the 2000s. 

In it, he talks about the early days of the internet and how similar it is to Web3 today.

Now this might shock a few of the younger folks but….the Internet wasn’t always as popular as it is today.

In the early 2000’s:

• People spent ~30 minutes online (compared to ~7 hours today)

• Email was the most popular internet use case and no one though it needed to be faster

• Building things on the internet was a weekend hobby. Trying to build an online business would make you the laughing stock of town.

But even though most people viewed these early products as “toys,” they ended up being the multi-billion dollar companies we all know today.

Chris believes history is repeating itself in crypto and Web3. It isn’t just hype.

So what’s his advice?

• Preserve money (don’t degen it all away)

• Focus on the product cycles. Things that look interesting to smart people usually do because they are rich with product possibilities

What the smartest people do on the weekend is what everyone else will do during the week in ten years.

Now for the second question: How long will the pain last?

For this one, we’re gonna phone another crypto OG and get some insights from Tom Loverro.

Tom is:

• An investor for IVP (invested in companies like Coinbase, Discord, and FTX)

• A former board member for Coinbase

• An OG crypto investor that’s been in the game since 2013

Here are some of his predictions

• Crypto prices will go lower this year

• Prices will flatten until the 2nd half of 2023

Why? Two reasons:

1/ VCs and crypto investors suffer from “recency bias”. They’re expecting a quick rebound. Which is exactly what happened after the 2020 Covid black swan.

But a black swan isn’t the same thing as a bear. And this bear is the result of rising interest rates, so he expects the rebound to take longer.

2/ Going from peak to floor historically takes ~12 months. BTCs peak was in November 2021. So if history is to repeat itself, the bottom might not hit until later this year.

His advice? Have enough cash to get you through the next 24-36 months. And take time to prepare for the next run. Crypto will come back bigger than ever.

History may not repeat itself, but it does rhyme.

So here’s a little rhyme for you:

Roses are red,

markets are too...

But we’re here for the long haul,

how about you?

AXIE INFINITY FINALLY MAKES ITS RETURN

Axie Infinity was hacked for $625m in March and has been frozen ever since.

Yesterday, the popular play-to-earn game finally made its triumphant return - aka players were finally able to make deposits and withdrawals from the game.

Since the hack, the Axie team has been working on:

1/ beefing up security so no more hacks happen

2/ recovering users’ funds

The team has successfully done both, and the gates have been reopened. But the question now is, can they make the Comeback of the Year?

Axie Infinity was once the champ of play-to-earn games. Now they’re like your local rec basketball team.

The Milk Road's Take: The downfall for Axie has been brutal. Between hundred million dollar hacks & failed tokenomics, people want out. We’ll see if they can make the comeback, but we aren’t betting on it.

The best part in all this is that the Axie team actually reimbursed users as they promised. Big props to them for that.

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DAO OF THE MONTH: VIBE

We’re coming at ya with another episode of DAO of the Month!

This time we’re talking about VibeBio - a community of patients, scientists, and medical partners.

Their goal? Fund & develop treatments for rare diseases.

Here are the major problems:

• 1 in 10 Americans have a rare disease. (Half of them are children)

• Getting funding to develop cures is really hard. Big pharma companies don’t fund these cures because they won’t make as much profit

• Even if a cure already exists, patients can’t afford the cost for the treatment

Here’s how VibeDAO plans to solve it:

• Raise money through their $VIBE governance token

• Allow members to vote on which rare disease research proposals get funded & developed

• Create & fund programs that provide treatments for patients with rare diseases

They’ve raised $12M (including investment from our friends Balaji AND Naval), and will be voting on their first batch of research proposals very soon.

VibeDAO has already partnered with two medical organizations to fund and begin developing cures for rare & fatal diseases.

The Milk Road’s Take: DAOs have been getting a lot of hate lately. And that’s because everything is turning into one. But the reality is, that it’s not the best fit for most businesses. Lil Jimmy’s lemonade stand sure doesn’t need one.

But this is actually a pretty cool use case where patients, researchers, and scientists are in charge of funding & development, instead of big pharma companies motivated by one thing: making money.

TRIVIA OF THE DAY

We’re coming at ya with another trivia…

What was the first movie to accept bitcoin for ticket purchases?

a) Top Gun: Maverick

b) Dope

c) Spider-Man: No Way Home

d) King Richard

The 11th person to reply to this email with the correct answer wins 0.1 ETH. That's right, we're doing it old-school radio game style.

MEME OF THE DAY

It’s funny because…rumors are flying around that Sam (CEO of FTX) is trying to buy everything in sight - Robinhood, other companies, etc. and Sam is vegan.

Ok there. I explained the meme.

CORRECTION TO THE CELSIUS STORY

Yesterday we shared a story we read that Alex Mashinski (CEO of Celsius) was detained at an airport trying to leave the country. The Celsius team has come out and said these claims are false. Here’s their official statement:

If this market dip keeps dipping I’ll be fleeing my house and eating my emotions at a nearby Cinnabon!

Stay thirsty my friends, see ya tomorrow!

Ben "2% Milk" Levy & Diego "El Lechero" Salinas

A Review from the Road...

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• 🥛🥛🥛🥛🥛 F**king great

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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.