September 06, 2024 | Read Online

🥛 Will the Fed stick the soft landing? 🛬

PLUS: Crypto’s top earners of 2024 (so far) 💰

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GM. This is Milk Road. The newsletter that's always there – ready with a hug – whenever your portfolio is being mean to you.

Here’s what we got for you today:

✍️ One step closer to a soft landing
📊 Crypto’s top earners of 2024 (so far)
🎙️ The Milk Road Show: How the FED Impacts Markets: Rates, Recession, Unemployment & More w/ Kyla Scanlon
🍪 CZ permanently lost his right to manage Binance

Prices as of 9:30AM ET. Click here for our Fear & Greed Index

ONE STEP CLOSER TO A SOFT LANDING ✈️

No.

The fanfiction you wrote about Warren Buffet and Charlie Munger being stranded on a desert island (Berkshire Castaways) did not, finally go viral.

Those notifications were coming from Trading View, after August’s unemployment data came in and momentarily spiked prices (before dropping again).

Here’s what you need to know:

1/ We were on target for the first time since April. 🎯

Source: @BCBacker

2/ Jobs growth missed, but still showed growth. 🌱

Source: @byHeatherLong

3/ A soft landing is still on the table. 🛬

The Fed has been attempting to cool the US economy (bring inflation down), without overdoing it (pushing us into recession).

Which is often likened to landing a plane – gradually descending over time, instead of nose diving into the tarmac.

Here’s how those two potential outcomes could play out:

Soft landing = cutting rates in a healthy economy. Which looks something like this…

Unemployment stays steady or rises slightly – consumers maintain their buying power, while the Fed remains confident that cutting rates won’t lead to runaway inflation.
Economy cools slowly – enough to curb inflation, while avoiding mass panic-selling.
Economic activity remains steady – consumers continue to put their money back into the economy.

Hard landing = cutting rates to try and save a broken economy. Which looks something like this…

Unemployment rises sharply – folks have less money to spend.
Economy slows rapidly – investors pull their money out of the market.
Economic activity reduces drastically – consumers start saving more, putting less money back into the economy.

Of all of these metrics, the most important one right now is unemployment.

To pull off a soft landing, unemployment needs to sit riiight in the goldilocks zone:

Not high enough to trigger a recession.
Not so low that the Fed holds off on rate cuts (hindering new cash from entering the system and pumping our respective bags).

Good news is, right now just about all of this data is trending towards a soft landing. 🫂

Unemployment softened ever-so-slightly, inflation is easing steadily, and retail spending is up.

But as is always the case when you’re using backward looking data, this could change…

And it’s that kind of uncertainty that the market hates – so don’t be surprised if we see extended chop this month.

…ok, but where to from here? What’s the Fed’s next move??

Kyla Scanlon, author of 'In This Economy? How Money & Markets Really Work' (and all-round G.O.A.T. of the financial education space) joins Kyle Reidhead on today’s episode of The Milk Road Show to discuss that and more!

Here’s just some of what they cover:

Is the US already in a recession? 📉
What are the prospects of a soft landing? 🛬
A look forward to 2025’s economic prospects… ⏩

Watch/listen/devour it below! 👇

YouTube | Spotify | Apple Podcasts

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COTD: CRYPTO’S TOP EARNERS OF 2024 (SO FAR) 💰

Alright, let’s close out the week with a frothy little chart and some quick-hitting takeaways.

Here’re the top earners in crypto (by revenue) so far in 2024:

Source: TokenTerminal

Shout out to Lex Sokolin for inspiring this one!

Shot out of a cannon, and onto the page – here are our top 3 takeaways:

1/ Remember yesterday when we covered the ‘Fat App Thesis’, which predicts apps will eventually out-earn infrastructure products?

Yah. We ain’t there yet.

Infra is still earning way too much money for developers to ignore! 👀

Give it * checks watch * say, a couple of years?

2/ Are exchanges doing ok (can someone check)?

We didn’t expect so many of them to be sitting so far left on this chart.

3/ Should we be starting a stablecoin?

Of the top five revenue earners – four (four!) of them are either stablecoins, or earning the bulk of their revenue through stablecoins.

Kind of feels like someone should write a report on how they’re set to explode… ✍️

And before you say – we know! Revenue isn’t as sexy as token appreciation…

But! Here’s why it’s a metric worth monitoring:

Revenues support profits → profits help to grow the underlying app/protocol/project → growth contributes to token values over time.

Beautiful, no? 🥲

BITE-SIZED COOKIES FOR THE ROAD 🍪

CZ permanently lost his right to manage Binance under a U.S. settlement, but he still retains his shareholder status. This allows him to influence decisions from behind the scenes, though he can no longer hold an operational role.

Japan’s top three banks are collaborating on a stablecoin platform for cross-border payments, aiming to speed up international transactions. The project, named "Project Pax," is expected to go live by 2025, revolutionizing how global payments are handled.

Rune Christensen defended the introduction of a freeze function for the $USDS stablecoin, arguing that it’s essential for regulatory compliance, especially for real-world assets. However, any decision to enable the function will be voted on by the community.

Sonic SVM is launching a $12.8M sale of 50,000 HyperFuse nodes to support its blockchain gaming platform on Solana. Node operators will help maintain the network and potentially earn rewards, with future airdrops also a possibility.

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!

MILKY MEMES 🤣

Source: @wallstreetbets

Source: @naiivememe

Source: @alancarroII

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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.