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GM. This is Milk Road, the crypto newsletter with more sparks flying than a Trump and Musk interview live on X.

Here’s what we got for you today:

$ETHE ETF OUTFLOWS ARE SLOWING – ETH PUMP LOADING ⛽

The Grayscale Ethereum ETF (aka $ETHE) had its first day without outflows 🎉

$ETHE stopped bleeding out for a day? We love that! 

…but why does it matter?

First, it’s part of a broader trend – outflows of $ETHE have been trending down pretty darn consistently ever since the ETF launched, indicating that the larger majority of $ETHE sellers may have already exited.

(Less outflows + steady or increased inflows = more green days for $ETH and its ETFs).

Second, the $ETHE outflows are outpacing that of GBTC (Grayscale’s $BTC ETF) – in a good way! It took GBTC almost four months to see its first day of zero outflows – $ETHE speed-ran it in three weeks 👇

(Beautiful, no? 🥲)

Third, $ETH’s supply dynamics work a little differently to our old friend Bitcoin. $ETH gets burned the more it's used, helping to not only keep the supply steady, but potentially reduce it over time. 

(Plus, ~40% of $ETH is locked up in smart contracts, reducing circulating supply even further).

Add that together, throw some milk n’ flour into the bowl, mix it all up and you get this doughy little morsel of insight:

ETF driven demand for $ETH is trending up faster than previously expected, while the amount of new $ETH hitting the market each day is currently lower than $BTC 👇

These same ETF-driven supply/demand dynamics lead Bitcoin to make history by reaching its new all-time high before the halving.

And we may just be witnessing the same for $ETH.

🥛 Milk Road Take: In the short term, this outflow trend could totally reverse itself (this is crypto we’re talking about – expect the unexpected).

That said – once the Fed starts cutting rates (confirming a risk-on environment), we expect the cash spigots to turn on and for $ETH to soak a whooole lot of it up, flipping inflows green 🧽 💵.

…now, who wants a running chest bump??

COTD: WEEKLY CRYPTO FUND FLOWS 📊

In a single sentence? 

Market vibes are down, but fund flows are up! Let’s dig in…

Here’re the headlines:

Here’s who’s leading the buying:

Here’re our biggest takeaways:

Every region saw inflows last week (that’s rare)! Which means that, while the market vibes were down, smart money got-to-buying.
And with $BTC only juuust flipping positive (+$13M), this put $ETH (+$155M) well and truly in the lead for weekly inflows!

(Please. Do not make us ask again. Chest. Bump.)

PRO “WHERE ARE WE IN THE CYCLE?” INDICATORS 🤔 

Crypto moves in cycles, and knowing where we are in the current cycle is crucial for capturing the best opportunities.

The goal is to spot the bull market peak before the inevitable bear market hits your bags hard. 🥊 

Since timing the top perfectly is almost impossible, we use various indicators to give us a better shot at taking profits before it's too late. 🚦 

Below are the 5 indicators we track, with a color-coded system to show how close they are to signalling the market peak:

🟢 Plenty of room to run 🏄

🟡 Getting closer to the top signal, but haven’t yet reached the mark ⚠️

🔴 We’ve hit the market top indicator 🚨

Every Tuesday, we update these 5 indicators exclusively for PRO members.

Our advice? Don't wait for all of them to hit 🔴. It's better to take profits as they get closer to that point.

Let's dive in and see if we're anywhere near the top of this bull market. 👇

BITE-SIZED COOKIES FOR THE ROAD 🍪

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Grayscale introduces crypto fund for Maker's $MKR. Saylor’s Grayscale launched a new single-asset fund focused on Maker’s governance token, the fund is available to accredited investors. The announcement sent $MKR up over 5% in an hour, reaching $2,100.

Bitcoin and Ethereum rally could spark a 'sexy shitcoin soiree' ahead of election. Arthur Hayes predicts that if $BTC and $ETH break $70K and $4K, respectively, it could ignite a wild altcoin rally. He also believes the U.S. government will boost market liquidity before the election.

Hut 8 sees 72% revenue jump but $72M net loss in Q2. The public company’s revenue soared to $35.2M, driven by growth in computing services and lower mining costs. Despite this, a $71.8M fair value adjustment led to a $71.9M net loss.

Canadian crypto exchange ‘ezBtc’ founder guilty in $9.5M fraud. David Smillie, founder of ezBtc, defrauded investors of $9.5M, misusing over 2,300 Bitcoin and 600 Ethereum for personal expenses and gambling. The exchange went offline in 2019, leaving investors unable to access their funds.

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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.