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Todayβs edition is brought to you by LightLink β an Ethereum Layer 2 blockchain that lets dApps and enterprises offer users instant, gasless transactions. |
Follow LightLink on Twitter and don't miss the upcoming TGE and Airdrop. |
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GM. This is Milk Road, the newsletter that peels back cryptoβs layer like an onion - let us do the crying for you. |
Hereβs what we got for you today: |
BTC is going up, up, and away π The Dencun upgrade is coming πͺ |
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BTC IS GOING UP, UP, AND AWAY |
This weekβs crypto rally reminds me of one of my favorite scenes from Family Guy. Hear me outβ¦ |
In the episode, Peter Griffin (i.e. the main character) goes to a baseball game. Every time he has his back to the game, someone scores. But every time he turns around to watch, nothing big is happening. |
Right now, crypto feels the same way. BTC started the week at $52K. |
Two days laterβ¦ itβs at $61K. |
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Just in case you blinked and missed something, here are 4 graphs to help explain whatβs going on: |
1/ ETF issuers are buying up 10x more BTC than miners are producing. |
This is a common trend weβve been seeing since the Bitcoin ETFs launched last month. |
Yesterday, it happened again⦠|
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Why this matters: I got a βC-β in economics (Cβs get degrees!) but even I know that when the demand for an asset is 10x the supply being producedβ¦ thereβs a demand shock and prices shoot up. |
Weβll see how long the trend continues. |
2/ Gold is losing its shine, while Bitcoin is in its prime. |
Check it out⦠Bitcoin ETFs are catching up to Gold ETFs. |
Gold ETFs currently hold ~$92B. Bitcoin ETFs currently hold ~$40.7B. |
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P.S. - According to Bloomberg analysts, thereβs a good chance Bitcoin ETFs pass Gold ETFs in assets under management (AUM) within 2 years. |
3/ Fidelity upped its BTC allocation. |
A few weeks ago, Fidelity added a small allocation (1%) of one of its funds to invest in BTC. |
Itβs a fund dedicated to βconservativeβ investments. AKA boring assets that get your grandparents excited. It includes stuff like investment-grade debt, U.S. equities, international equities, etc. |
Well, fast forward to today, Fidelity has added exposure to crypto across multiple funds⦠|
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The best part? Fidelity increased its allocation from 1% β 3% for some of those funds. |
Slowly, but surely, exposure to BTC is being normalized. |
4/ Short Gamma could lead to another BTC rally |
Back in late October/early November, BTC jumped like 30% within a few weeks. (Sound familiar?) |
Thatβs when I first learned about βshort gammaβ. We talked about it here, but hereβs the TLDR: |
Investors can buy/sell options contracts for an asset (i.e. Bitcoin) whenever they want. Whenever that happens, market makers (aka the entities that offer options contracts) take the opposite side of investors' trades to maintain a market-neutral portfolio. This is called βgamma hedgingβ and market makers do this by buying/selling the underlying asset (i.e. BTC) as prices move. |
This means that as prices go higher, market makers need to buy more BTC to hedge and maintain a market-neutral position. |
Sometimes this leads to a βgamma squeezeβ. It looks like thisβ¦ |
Prices go up β market makers need to buy BTC β pushing prices higher β forcing market makers to buy more BTC β pushing prices even higher β leading to a happy Milk Man. |
Well, according to a few experts, it looks like a gamma squeeze could be happening⦠|
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To quickly summarize everything going on: |
BTC is going through a demand shock. BTC ETFs are catching up to Gold ETFs. Trillion-dollar asset managers (like Fidelity) are allocating 1-3% of funds to crypto. A gamma squeeze could push prices higher. |
Buckle up, folks. Weβre in for a ride. |
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| | If you build it (and make it gas-free) they will come. | LightLink, an Ethereum L2 blockchain known for introducing gasless transactions to Animoca Brands' portfolio companies, has a history of developing blockchain solutions for major enterprises in APAC since 2017. | So, how does it work? | LightLink lets dApps and enterprises prepay gas fees for their users. | With that, 600,000 LightLink users have already minted 2.5 million NFTs in a single month β for free! π€― | Minting 1 million NFTs on Ethereum would have cost users ~$225M in gas fees On LightLink, it would cost the project $50K max and is 100% free for users | In the past few weeks alone, LightLink has partnered with Animoca Brands, secured a $4.5 million seed round, and reached 125,000 transactions on the Mainnet. | If you think gasless transactions MIGHT be a game changer, follow LightLink on Twitter and donβt miss the upcoming TGE and Airdrop! | |
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BITE-SIZED COOKIES FOR THE ROAD πͺ |
How Airdrops Work and Where To Find Airdrops. Check out the Milk Road guide to earning free tokens and an explanation of how they work. Who doesnβt like free stuff right? |
The Ethereum Foundation announced the Dencun network upgrade has been βsuccessfully activated on all testnets.β Next up? Activating the upgrade on the main network. This is scheduled for March 13. |
Kraken launched a new platform targeted at institutional investors. The ββservices include using Krakenβs spot exchange, derivatives trading, qualified custody, and indices. |
Telegram says it will start sharing ad revenue with users starting in March. All payments and withdrawals will be settled on the TON blockchain, a network created by the company that built Telegram. |
Strike is rolling out its payment services in Africa. The services will be expanded into Gabon, Ivory Coast, Malawi, Nigeria, South Africa, Uganda, and Zambia - with more African markets to come in the future. |
The βNewborn Nineβ Bitcoin ETFs now hold 300,000 BTC (worth $17B). By the way, thatβs about 1.5% of the current BTC supply. |
VanEck launched a new NFT marketplace and digital assets platform called SegMint. VanEck was one of the first to apply for a spot Bitcoin ETF and now itβs one of the first to launch its own NFT marketplace. |
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MILKY MEMES π€£ |
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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. |