How Smart Investors Are Using Leverage + Coinbase’s Power Move w/ Milk Road PRO
Mar 29, 2025
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Kyle Martin, a member of the Milk Road Pro research team, dives into the intriguing world of leveraged crypto investing with a focus on risk aversion. He discusses Coinbase's strategic integration with Uniswap and its new verified liquidity pools, highlighting their impact on institutional adoption. Martin also examines the balance of security and compliance in onchain trading, and the shifting dynamics between centralized platforms and DeFi. With insights on stablecoins, market sentiments, and leveraging Bitcoin, this conversation sparks optimism in the evolving crypto landscape.
Leveraging in cryptocurrency can enhance investment potential when borrowing costs are low, but it carries substantial risks that require careful management.
Coinbase's integration of verified liquidity pools within the Uniswap ecosystem addresses institutional compliance needs while potentially reshaping on-chain trading dynamics.
The rapid growth of the stablecoin market, driven by institutional interest, signifies a fundamental shift towards using on-chain assets for everyday transactions.
Deep dives
Understanding Crypto Leverage
Leverage in cryptocurrency involves borrowing funds to amplify investment potential. A key insight shared is that using leverage can be strategic when borrowing costs are low, allowing investors to purchase more assets without depleting their capital. One individual in the discussion utilizes decentralized finance (DeFi) to manage his leverage, maintaining a safe loan-to-value ratio of around 25-30% and expressing confidence in his investments' long-term appreciation. This strategy raises caution as leveraging entails significant risks, highlighting the importance of employing it judiciously, particularly in bear markets.
Coinbase's Verified Liquidity Pools
Recently, Coinbase introduced verified liquidity pools that require users to be KYC-verified for participation, a move aimed at catering to institutional clients' compliance needs. This integration into the Uniswap ecosystem allows Coinbase to offer a controlled trading environment while capturing the cost advantages associated with on-chain transactions. The potential ramifications for tokenized assets and broader market participation are significant, as verified pools could attract capital that has historically been limited by regulatory barriers. However, skepticism remains regarding whether retail investors will favor these verified pools over existing decentralized exchanges.
The Rise of Stablecoins
The stablecoin market is witnessing rapid growth, with an increase in capital flowing into assets like USDC and DAI, which provide an avenue for users to earn yield. Predictions indicate that the stablecoin market cap could reach upwards of $500 billion by the end of the year, driven by institutional and retail interest. The discussion highlighted that many corporations are starting to use stablecoins for payroll and treasury operations, underscoring a shift towards on-chain assets for everyday transactions. This trend is likely to continue as users seek the benefits of stability and returns that traditional fiat currency cannot offer.
Institutional Interest in Crypto
Despite a bearish sentiment among retail investors, the podcast highlighted a contrasting bullish outlook from institutional players entering the crypto market. Companies such as BlackRock and major financial firms are actively exploring the potential of blockchain technology and its applications, indicating a growing acceptance within traditional finance. This divergence emphasizes how market expectations can differ significantly; while retail investors may focus on short-term price movements, institutions are looking toward long-term integration and growth opportunities within the crypto ecosystem. The participants asserted that this period might represent an opportune moment for the sustained growth potential within the crypto space.
Token Snapshots: Analyzing Emerging Projects
The introduction of token snapshots aims to provide detailed assessments of various cryptocurrencies and projects beyond those included in the primary portfolio. These snapshots present an overview of project fundamentals, bullish and bearish cases, and critical metrics to monitor for performance and risk evaluation. The first analysis focused on Airdrome, which is gaining traction as a leading DEX on the Base network, yet concerns have been raised regarding its reliance on incentivized trading volumes. By providing context and rationale for investment decisions, the token snapshots are designed to equip investors with nuanced insights and help guide their market strategies.
In this episode, we get into using leverage and why one of the most risk-averse investors we know is doing that. We also break down Coinbase’s integration with Uniswap and what their “Verified Pools” move means for the future of onchain trading and institutional adoption.
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The information presented in this video is for educational and informational purposes only. It should not be considered as financial, legal. The views and opinions expressed by the speakers, are their own and do not constitute professional advice. Investing in cryptocurrencies carries significant risks, including the potential for substantial losses.
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