PRO | Welcome to the Banana Zone 🍌

GM! Welcome to Milk Road PRO. The newsletter that’s like a cold splash of water and a double espresso.

(We’re here to sober you up when you get drunk on gains).

Well friends, we’ve made it to the promised land.

Another wild crypto bull market (aka Banana Zone) is underway, the 5th since the invention of the blockchain.

These moments are where most of the gains in crypto are made. 

In the coming weeks/months, the entire industry will be repriced. Our portfolios will double, triple, quadruple or more in such a short period of time.

No other industry brings gains as large, or as fast as crypto in these moments.

If you managed to allocate into crypto before November 5th, the beginning of the Banana Zone, take a second and give yourself a pat on the back.

It’s never easy to allocate capital, especially a meaningful amount during times of fear, uncertainty and doubt - which is where things have been in crypto for the last few years.

Allocating before everyone is doing it and before it’s “obvious” takes courage and conviction  - so kudos to you for making it happen.

That said, the Banana Zone is not just the time where most of the gains are made, it’s a time where most of the mistakes are made too.

Today’s report is your final warning to prevent you from making the mistakes that so many did before you. ⚠️

Last cycle, most of my friends ended the banana zone with less money than they started with 🤦Imagine losing money in crypto when its total market cap went up 2,300% in just over 1 year! 

Everyone thinks there’s no way that will happen to them, yet it happens to most retail investors in crypto. 

But not you, and not this time! 

Because you’re going to read this report (ideally reread it on a weekly basis) and listen to this advice!

Today I’m going to walk you through:

1. What you should expect during this Banana Zone

2. The Do’s and Don'ts during this time

3. How to think about your investment strategy over the next few months

But before I do, a quick PSA to our Milk Road readers!

(P.S. - We’re hosting a PRO AMA next week — scroll to the bottom for more info. 👀)

PSA: THIS IS YOUR LAST CHANCE TO ALLOCATE TO CRYPTO

I’m going to start this section off with a memo from an $800 Billion AUM research firm, Bernstein, which they wrote to their clients and investors…

“Buy everything you can” “Add crypto exposure asap” “Don’t fight this”

Milk Road readers and listeners have already heard us scream this since early 2023, but now this message is being put out into the Tradfi world and even mainstream media.

The message is very clear: The Banana Zone has begun!

Of course, the title of this section is a little over exaggerated. Crypto is a long term secular trend which is still in its early days. There will be plenty of great chances to allocate to crypto again, however in just a few days to weeks it will no longer be one of them.

To be clear, I think crypto continues to go up for the next 6-12 months at least, however allocating capital is all about doing so when the risk / reward makes sense.

We first started telling our PRO members to buy $SOL when it was at $25 and $BTC back when it was <$20k. Sure, both assets could have gone down another 50% at the time, but it had potential to go up 10x or more in the near term too. That’s a compelling risk / reward.

Today, Bitcoin could again go down 50%+ but it's upside this cycle is what, maybe $150k-$250k? 

That’s a little more than a 2x from current prices. The risk / reward of allocating a meaningful amount of your portfolio into the crypto majors is waning quickly.

It’s becoming more and more risky to allocate at these prices, even though we still believe prices will still go up from here. And that’s because there will be a downside at some point, we just don’t know when or how much.

To help paint this picture a little more clear for you.

In the last crypto cycle Bitcoin hit $69k in 2021, 3.5x higher than the $20k high from the previous cycle in 2017. Not a bad investment even if you bought at the previous all-time high.

However, in the 2022 bear market Bitcoin retraced below the previous cycle's all-time high, down to $16k, making those who bought at $20k in the red.

Now to be fair, for those who bought at the previous all-time high of $20k, if you held long enough you would be sitting real nice today at ~$99k. 

However, you would have needed to hold for 4 years, through a 70%+ drawdown and have conviction through FTX, Terra Luna, 3AC and many other crypto companies collapsing and going bankrupt! 

Not an easy thing to stomach.

On the other hand, for those who bought early in 2020 or even during the 2018 and 2019 bear market, the retracement back to $16k was irrelevant, those investors were still up multiples during the entire 2022 bear market. It also becomes much easier to take profits early in the banana zone if you purchase at a much lower price.

All this to say - If you’re still on the fence to allocate or waiting for a pullback - stop waiting. 

Get in now, take whatever profits you can get this cycle (don’t expect a 10x or 100x if you’re allocating at these levels) and stick around during the next bear market so you can allocate at a more appropriate time to capitalize on the next cycle.

Of course, there’s still profits to be made this cycle. 

But I recommend always playing the long term game in crypto, it increases your chances of succeeding significantly. 

If your goal is to simply get rich quick and get out, you will fail. I promise you that.