It’s time for Cryptonite - our monthly roundup of all things crypto - with Dr. Tejaswi Nadahalli.
You can follow Tejaswi on twitter @nadahalli and he blogs at tejaswin.com
A detailed summary can be found here.
Concise Summary (via recall):
Chainlink and Decentralized Oracles
Tejasvi is working on cryptography and privacy at Chainlink, a company that provides external data to blockchains, known as an Oracle, allowing for the monitoring of collateral prices and other data feeds 00:59.
Chainlink is a decentralized Oracle that uses multiple nodes and open-source software to provide data to blockchains, but it can still be seen as a single point of failure, and protocols often use a combination of on-chain and off-chain oracles to mitigate this risk 02:55.
Hyperliquid and On-Chain Visibility
The James Wynn Bitcoin saga on Hyperliquid, a decentralized perpetual exchange, highlighted the issue of liquidation values being visible on-chain, allowing others to take short positions against him, sparking a debate about the trade-offs between decentralization, privacy, and censorship resistance 07:21.
Hyperliquid has brought attention to the issue of stop loss orders being visible on-chain, allowing others to hunt them, and this is not a new problem, but rather one that has been present in both TradFi and crypto 09:41.
Bitcoin Dominance and Maturity
Bitcoin dominance is a measure of Bitcoin's market cap relative to the total crypto market cap, and it has been increasing, contrary to the expected altcoin cycle, possibly due to institutional adoption 16:04.
The maturity of an asset can lead to decreased volatility, and Bitcoin's long history gives it a "Lindy" advantage, making it a more stable option 21:08.
Ethereum, Solana, and Token Value
Ethereum and Solana have features that a "theoretically better Bitcoin" could have, such as decentralized exchanges and autonomous organizations, but it's unclear where the lasting value accrual happens in the crypto market 21:40.
The value of tokens, such as the HYPE token, is unclear, and the relationship between base platforms, application-specific tokens, and user activity is still being figured out, with Bitcoin being the most stable option due to its "money for enemies" concept 23:08.
Trump and WWE
Trump is compared to a WWE character, with his ability to play the hero or villain arc, and his knowledge of this world is thought to be an influence on his actions 30:53
The concept of "kayfabe" is mentioned, referring to the fictional narrative built in WWE to create drama, with villains and heroes playing their respective roles 31:10
Crypto as Entertainment and Security Risks
The crypto world is described as nihilistic, with the idea that it's all entertainment, and the term "trenches" is used to describe the experience of degen gamblers who develop PTSD after getting liquidated 32:24
The security risks of crypto companies like Coinbase are discussed, with the example of a hack where low-paid outsourced workers sold customer data, highlighting the need for seriousness and solid processes in place 33:26
The Cycle of Money and Government Control
The cycle of money, custodians, and government control is described, with the invention of new assets like bitcoin aiming to break this cycle, but ultimately facing the same challenges 35:27
Circle IPO
The IPO of Circle is discussed, with the opinion that they could have gone higher, but raising $1 billion is still a reasonable achievement, and the model of equity holders getting value is preferred over token holders 36:10
Markets this Week
A larger than expected rate cut cheered the equity markets on Friday…
… the long end was already down so RBI’s decision did not have much of an impact…
Real-estate stocks got a boost…
… but silver was the belle of the ball.
More here: country ETFs, fixed income, currencies and commodities.
Links
Research
The Risks of Passive Investing Dominance (SSRN)
Flows into passive strategies cause unrelated stocks to move synchronously, undermining diversification and potentially increasing systemic risk. New flows into passive products mechanically overweight overvalued stocks and underweight undervalued stocks due to market-price weighting, exacerbating momentum-driven price distortions.
Collusion through Common Leadership (NBER)
This paper studies whether common leadership, defined as two firms sharing executives or board directors, contributes to collusion. We find that the probability of collusion between two firms increases by 12 percentage points after the onset of common leadership, compared to a baseline rate of 1.2 percent in the absence of common leaders.
Data Scientists on Wall Street (SSRN)
Financial institutions have significantly increased their recruitment of data scientists in the last two decades. We find that the number of data scientists employed by financial institutions causally affects their ability to earn abnormal profits. Data scientists' ability to generate abnormal profits on a stock is positively correlated to the concentration of data scientists across all institutional investors holding the stock.
Crypto
Trump to launch branded crypto trading application (citationneeded).
A technology company Horizon launched a program that lets a homeowner access a portion of their home's equity — without monthly payments — and invest some of that equity in Bitcoin.
RBI Governor Sanjay Malhotra expressed concerns about cryptocurrencies, highlighting their potential to destabilize financial stability and monetary policy (economictimes).
Rapid uptake of crypto in developing economies raises concerns, says IMF’s Gita Gopinath (indianexpress).
Switzerland to exchange crypto info with India, 73 other countries (business-standard).
Tariffs
India on Tuesday formally challenged the US on higher auto tariffs by raising the matter with the World Trade Organization (bloomberg).
No one knows what the US president’s desired endgame with Beijing really is (ft).
Bessent, Lutnick and Greer keep Japan guessing in US tariff talks (nikkei)
India is making a case for redressal of US measures hurting Indian industry, such as taxes on steel & aluminium and auto as well as the proposed taxation on foreign remittances (thehindubusinessline)
India
The RBI cut its key repo rate by a larger-than-expected 50 basis points on Friday and slashed the reserve ratio for banks as low inflation gave policymakers room to focus on supporting growth amid a volatile global economy (reuters).
The Centre has laid down reform goalposts for states in mining, urban development and planning, electronic enforcement of road safety, and land reforms, promising incentives through the budget capital expenditure scheme on milestones being achieved. The total outlay for FY26 is Rs 1.5 lakh crore through 50-year interest free loans (economictimes).
India’s top two IT companies—Tata Consultancy Services Ltd (TCS) and Infosys Ltd—are seeing a sharp decline in their young workforce, raising concerns over the sustainability of the traditional employee pyramid model (livemint).
MCX to launch electricity derivatives (livemint). This was pending for over five years (economictimes).
India is looking to give a significant boost to its production-linked incentives for drug manufacturing, particularly in terms of its ambition to reduce the domestic pharmaceutical industry’s dependence on China for its raw materials (livemint).
City after city in India suffers from the same problems every year, and yet the political or administrative classes seem either helpless in solving such well-known problems or incapable of preventing their recurrence (livemint).
Are car sales at risk of hitting a premature plateau in India? (livemint)
India’s auto industry growth could slip into negative due to rare earth magnet shortage (cnbctv18).
In the first three months of 2025, overall phone sales dropped 6% year-on-year. During the same period, smartwatch sales dropped 33% year-on-year —marking the fifth consecutive quarter of decline for smartwatches (livemint).
We live in an era in which manufacturing produces fewer and fewer jobs in factories because of the increasing use of robots. A peculiarity of New Delhi’s obsession with manufacturing over several decades is that it trumpets successes in capital intensive manufacturing while treating labour-intensive industries, such as garments and tourism that produce thousands of jobs, as stepchildren (livemint).
FinMin flags concern on complaints of alleged pan-India GST Data Leak (cnbctv18).
row
From bromance to breakup: How Elon Musk and Donald Trump blew up (npr)
Is the U.S. in a "high-level equilibrium trap"? (noahpinion)
In the Future, China Will Be Dominant. The U.S. Will Be Irrelevant (nytimes).
How to kill 346 people and get away with it (popular).
The US Supreme Court has sided with an Ohio woman who alleged she was discriminated against at her job because she was heterosexual (bbc).
The U.S. light vehicle sales rate slumped in May by the most in about five years following a rush by auto shoppers during the previous two months to beat anticipated price hikes stoked by President Donald Trump's tariffs on imported automobiles (reuters).
Britain at a crossroads: Finance, industry and the global adjustment (politico)
Brazil Sues EV Giant BYD Over ‘Slavery’ Conditions at Plant (bloomberg)
The number of newborns in Japan is decreasing faster than projected, with the number of annual births falling to another record low last year (cnn).
Italy: An exodus of educated Italians searching for better opportunities abroad is exacerbating the economic strain of a rapidly ageing labour force (ft)
Odds & Ends
Meta's large language model Llama 3 told a user who identified themself to it as a former addict named Pedro to indulge in a little methamphetamine — an incredibly dangerous and addictive drug — to get through a grueling workweek (futurism).
Is the decline of reading poisoning our politics? (vox)
If there’s a universal law of human behavior, I think it’s this: People will believe whatever allows them to be the hero of their own story (usefulfictions).
Meme of the Week
