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GM. This is Milk Road. Crypto is like a mess of old charging cables — and we’re here to help you untangle it!

Here’s what we got for you today:

THESIS: CRYPTO APPS WILL FLIP BLOCKCHAIN INFRASTRUCTURE 🔄

“What’d you just call me?”

No, no! You misheard us! We said ‘Fat App.’

It’s a thesis about where money flows and collects in the online space, over time. 🤑 

See, early on in the adoption phase, the infrastructure that builds/supports a new digital network tends to soak up most of the money.

The same way that, before you can start building the homes, office buildings, and apartments that make a city – you need roads, sewage, and cable lines to be laid.

With the early internet, the stuff that vacuumed up most of the investment dollars were things like:

…but over time, the revenues from these infrastructure businesses plateaued and faded, as demand shifted from: 

“We need your product(s), in bulk – ASAP!”

To… 

“We just need you to help us maintain what we already have (and if you raise prices, we’ll go to one of your competitors)” 🖕 

Long term, it’s been shown that more money flows to the businesses built on top of that same infrastructure. Why? Flexibility and pricing power.

For example:

Don’t like Amazon? There aren’t too many competitors that can offer all the same services, at the same price – and still turn a profit. 

(Meanwhile, infrastructure products are near-identical to one another, in both cost and performance).

1/ Infrastructure is “the guy who peaked in high school” 👇

2/ While the businesses built on that infrastructure are “the kid who shows up to the 20-year reunion in a Rolls” 👇

Neat. So what does this have to do with crypto? 

Well, there are some early signs that the ‘Fat App Thesis’ could be playing out in the blockchain space…

For protocols to keep their main customers (app builders) happy long term, they’re likely going to have to keep their fees as close to zero as possible.

Meanwhile, app builders are playing a different game! 

If they have a great product, with a huge network of users that can’t get the same thing anywhere else, they can charge more.

Check out how much Aave earns in fees (purple) vs. the fees it pays to Ethereum (white) 👇

Sure, this is one cherry picked piece of data – and it doesn’t guarantee the ‘Fat App Thesis’ will play out across crypto like it did the internet…

But it shows us that disparity in ‘app vs. infra’ pricing power already exists in crypto.

And if blockchain apps/businesses go the way of their web2 counterparts over time – we might need to adjust our portfolio strategies. 🔧

COTD: WE NEED A WELLNESS CHECK ON THE CRYPTO ETFS, STAT! 📊

If you wrote the current story of the $ETH/$BTC ETFs into a movie, it’d be straight to DVD.

Money coming into the $ETH ETFs flattened out to around zero over the past week or so, before dipping into negatives yesterday (insult, meet injury). 😑

Ok, what about Bitcoin – there always seems to be demand for Bitcoin.

Let’s brighten our outlook by taking a peek at the Bit—

Oh, dear lord! (Jesus, take the wheel). How is it worse??

Alright, guess we’ll just need to wait this one out…

If you need us, we’ll be wrapped in a security blanket, listening to whale songs, and waiting for these charts to stop yelling at us. 😵‍💫

…in the meantime, why don’t we check in and see what’s happening on The Milk Road Show (maybe that will cheer us up)?

BITCOIN'S WORST MONTH AHEAD? 😵

Wow. Thanks a lot guys.

It’s not what we wanted – but honestly, it was exactly the kinda reality check we needed.

In this episode of The Milk Road Show, Zeneca joins Kyle Reidhead to cover:

We may be biased, but we believe this is one of our most valuable episodes yet! 

Check it out 👇

YouTube | Spotify | Apple Podcasts

MILK ROAD PRO PORTFOLIO UPDATES 📊

You know that vampire from ‘What We Do In The Shadows’ that feeds on people’s energy, instead of their blood?

Yuh, errr — he might have gotten a hold of our portfolio…

If you’re new here — every Thursday, we share our updated list of investments from the Milk Road PRO Portfolio. 

Disclosure: We are not a day trading portfolio so don’t expect a high volume of trades. Read our “how to build a crypto portfolio in 2024” report to learn more about our portfolio strategy.

Portfolio performance 📉

The Milk Road PRO Portfolio saw a significant decrease over the past 7 days. Our portfolio value is at $81.1K, down 9% since last week.

Another week, another red candle across all markets—not just crypto.

The second wave of bearish sentiment is raising fears about a potential recession, with all eyes on Friday's NFP report and the unemployment rate. 👀 

🔺If the rate comes in higher than expected, it could pressure the Fed to implement more rate cuts.
🔻 If it's lower than expected, it could ease recession fears and calm the economy.

Either way, both outcomes have potential positives, but let's see how the markets react.

We have two weeks until the Fed meeting and two months until the U.S. elections, both of which could serve as positive catalysts for the markets. 🚀 

Portfolio changes 👀

BITE-SIZED COOKIES FOR THE ROAD 🍪

Blockstream has launched its third series of BMN2 tokens, granting non-U.S. investors access to Bitcoin mining returns. Each token corresponds to 1 petahash per second of mining power, with 80% sourced from carbon-neutral energy​.

Core Blockchain introduced $LstBTC, a liquid staking token pegged to Bitcoin, allowing holders to earn rewards without locking up their Bitcoin. This aims to increase Bitcoin's role in decentralized finance by keeping assets available for DeFi use​.

Robinhood agreed to pay $3.9M in a settlement with the California Department of Justice over its crypto withdrawal restrictions from 2018 to 2022. Users were forced to sell their crypto back to the platform due to limited withdrawal options​.

Skyscanner has integrated Travala, allowing hotel bookings using over 100 cryptocurrencies like Bitcoin and Ethereum. The partnership offers access to 2.2M hotels in 230 countries, incentivizing crypto payments with up to 10% rewards​.

Join forces with the Milk Man! We’re looking for a Twitter Specialist + Content Creator who can mix crypto knowledge with top-notch tweets. Think you’re the one? Apply today and let’s get this show on the road!

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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.