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GM. This is Milk Road – the ‘Nutribullet of crypto’. We blend crypto news into a tasty, easy-to-consume treat.

Here’s what we got for you today:

• ✍️ The US’ credit score just took a hit

• ✍️ What to look out for this week

• 🎙️ The Milk Road Show: Time to Go All-In or Correction Incoming? w/ Zeneca

• 🍪 One step closer to the spot $XRP ETF

THE US’ CREDIT SCORE JUST TOOK A HIT 💳

Everyone’s freaking out over the US’ latest credit downgrade…

But we think the panic is overblown – here’s why:

1/ Moody’s downgraded the US’ credit rating from Aaa to Aa1

Think of it like this: if credit ratings were test results, the US just got its mark revised down from A+ to A (you’d prefer the A+, sure, but an A is still really good). 👇

And as you may have noticed from looking at that chart – Moody’s isn’t the only game in town. 

There are 3 major credit agencies: S&P, Fitch, and Moody’s (which is the latest agency to join the ‘America isn’t a perfect lender’ bandwagon).

S&P pulled the US’ “perfect” rating in 2011, and Fitch did the same in 2023.

…righto. So what caused it?

2/ Debt, deficits, and drama

In a nutshell, this is what pushed Moody’s over the edge:

• Huge debt: The US national debt is massive ($36.2T and counting)

• Big deficits: The US government spends more than it makes through taxes

• Political drama: Fights over the debt ceiling/budget make the US look less reliable

• Recent events: Moody’s downgrade came as Congress rejected a Trump-backed tax bill that would’ve added trillions to the debt, highlighting Congress’s inability to agree on anything vaguely fiscal

Now – how worried should we be?

3/ This isn’t a good thing. But that doesn’t mean you need to panic.

Jumping back to the test score analogy real quick – slipping from an A+ average to an A isn’t ideal, but treating it as if it's the end of the world is a little excessive.

Sure, it’s not a trend you want to see continue – but as it currently stands, it’s manageable (more of a ‘wake up call’ than a ‘death blow’).

And we’re not the only ones being chill about it…

The market is having the same reaction: the S&P 500 is down ~0.26% since the downgrade was announced on Friday, while the total crypto market cap is down 1.16% as of this writing.

The takeaway: 

We do not want to see this trend of lowered credit ratings continue.

…but this latest downgrade doesn’t have us worried enough to change our approach of ‘buy/hold fundamentally strong assets’.

Long story longer, Moody’s downgrading the US’ credit rating = ear muffs.

WHAT TO LOOK OUT FOR THIS WEEK 📆

This week in crypto is busier than an ant colony in a crumb factory!

Here’s what’s coming down the pike:

1/ Monday, May 19

The US Senate votes on the “GENIUS Act” stablecoin bill: we want this to pass – clear regulatory frameworks for stablecoins in the US will lead to further growth.

Trump is scheduled to speak with Putin: a step towards peace between Russia and Ukraine would be gladly welcomed here.

Bond yields are up (we want them to go down): any signals from the US gov. that tells the bond market “we’re getting our shit together by reducing spending and getting our debt under control” would help in this effort.

2/ Tuesday, May 20

Avalanche Summit starts in London (May 20-22) – if you hold $AVAX, watch for announcements – or get 15% off tickets with code: ROADTOSUMMIT.

3/ Wednesday, May 21

US Crude Oil Inventory data: this tracks how many barrels of oil are being held by US firms. More supply often leads to falling prices, and falling commodity prices (like oil) is one of the ingredients that can lead to Fed rate cuts.

4/ Thursday, May 22

S&P Global Manufacturing PMI data: are purchasing managers in the US manufacturing sector buying more or less inventory? An increase indicates future growth (and vice versa).

Arthur Hayes on The Milk Road Show: Arthur is a Bitcoin big brain, with a potential price target of $200k by the end of 2025. Don’t miss this one!

5/ Friday, May 23

April New Home Sales data: Are people buying new homes (and at what rates)? Long-term growth in the housing market is typically matched by growth in asset prices:

Alright, that’s just about everything.

The events listed as ‘must watch’ on our calendar are:

👉 Rising bond yields (Monday)
👉 The GENIUS Act vote (Monday)
👉 Trump & Putin’s powwow (Monday)
👉 S&P Global Manufacturing PMI data (Thursday)

(All of them either have direct impact on crypto markets, or clear second-hand effects.)

But now we want to know: what are you looking at this week? 

Reply to this email and let us know!

BITE-SIZED COOKIES FOR THE ROAD 🍪

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What’s the punishment for hacking the SEC’s X account? 14 months in prison.

One step closer to the spot $XRP ETF. As of today, trading of $XRP futures will be allowed on CME. - DL News

Bitcoin transaction fees just hit a yearly high. It currently costs over $2 to make a transaction on the Bitcoin network.

Is spot trading a little too boring for you? dYdX lets you trade perpetuals onchain with zero gas fees.**

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