Decentralization until it’s inconvenient

Plus: Robinhood wants to deliver you cash IRL

GM. Today’s market feels like a fruit cocktail: a weird mix, but we’re here to make sure it’s worth the sip.

🥊 Trader vs Hyperliquid.

🍋 News drops: Robinhood will launch DoorDash for cash, Binance exec spills the tea on his time in Nigeria + more

🍍 Market flavor today

Fear walked back into the chat, and major cryptos are slipping.

Why? Tariffs.

(What a surprise… as if it hasn’t been the reason for like a month now).

Donald Trump announced a 25% tax on all cars and car parts coming into the US.

That’s a big deal since the US imported around 8 million cars last year, worth about $240B – basically half of all cars sold in the US.

Trump says this will be great for the American car industry – more jobs, more investment…

However, experts are like, “uhh… yeah this will prolly backfire.” They think some US car factories could temporarily shut down, cars could get more expensive, and US trading partners could get pretty mad.

And it’s just the beginning – Trump plans to announce even more tariffs on April 2.

In fact, he’s already throwing hands: Trump warned that if the EU works with Canada to do economic harm to the US, he’ll hit both of them with even bigger tariffs than he’s already planned.

Funny timing here btw, since this rant came just days after some analysts had started to believe the whole tariff thing wasn’t gonna be as bad as feared + uncertainty will end.

The Kobeissi Letter never bought into the calm tho’ – they’ve been warning that things will prolly get even messier.

Here’s what they mean:

• Markets got too chill now: for the past week, there weren’t any big tariff updates, so investors started thinking the worst was over. That all went out the window today with the car tariff announcement tho’;

• The tariff uncertainty won’t end with the announcement: Barclays is warning that those tariffs could hit up to 25 countries – and they’re expected to respond with their own taxes. So, we’ve got a potential trade war looming;

• Trump’s not trying to avoid pain. His idea seems to be: suffer now, win later. And with inflation still running hot, the Fed might just roll with it too.

A whole lotta mess, basically.

BUT here’s the fun part (kinda): while stock markets are tanking ($400+ billion lost in tech alone this week), Bitcoin and other cryptos have actually recovered over the past few days.

And if tomorrow’s inflation report looks good, we could go even higher.

Plus, people online are feeling bullish too – Santiment says for every 1 negative crypto post, there are 18 positive ones.

Part of this good mood comes from institutions getting involved in Bitcoin:

• GameStop is investing in Bitcoin (as we mentioned yesterday);

• Bitcoin ETFs are still getting inflows;

• And a European Bitcoin treasury company called The Blockchain Group bought 580 more BTC.

So yeah, crypto’s kinda showing strength right now, but let’s not get too comfy. It could all change again tomorrow in this economy.

🥝 Memecoin harvest

Imagine explaining to your accountant that your biggest win this year came from these:

Data as of 09:00 AM EST.

Check out these memecoins and plenty more here.

Once upon a time (which is like, now), there was Hyperliquid – a decentralized exchange where you can bet on crypto prices going up or down (these are called perpetual contracts or “perps” if you’re one of the cool kids 😎).

It was having a good time on Earth – until one day (yesterday) its peace was disrupted by… an evil trader.

Here’s what went down:

• First, the trader opened an $8M short on a memecoin called JELLY – basically, he was betting its price would go down.

• Then, he removed his margin – the money you’re supposed to leave in the trade to prove you can cover your losses – which basically dumped the trade into Hyperliquid’s vault (aka HLP);

• Now, HLP had no choice but to hold the short – keep it open, pay interest, and risk getting wrecked if JELLY’s went up.

And guess what this tricky Ricky trader did next?

YUP, he started pumping JELLY – sent its market cap from $10M to over $50M in less than an hour.

Kachow – HLP was now down $12M on paper.

Then, a second wallet came into the equation, opened a long position (betting the price would go up), and made $8.2M.

Now, if JELLY had hit a market cap of $150M, the entire HLP vault could’ve been wiped out.

So the Hyperliquid team had to make a choice:

Let the protocol burn in the name of decentralization…

or

Step in and hit the emergency button.

They picked the button.

Validators delisted JELLY, changed its price way down, and force-closed all open positions.

Everyone except the suspicious wallets got automatically refunded, and what could’ve been a $12M disaster turned into a $700K profit.

As for the trader? He put in $7M, pulled out $6M, and still has around $1M that he is currently unable to withdraw.

(And might never get back, depending on how Hyperliquid plays it.)

The moral of the story:

Decentralized perps can get really crazy – one trader can push the whole system to its limits.

Hyperliquid reacted fast and saved the vault – but it also left people wondering:

How decentralized is “decentralized” when things go the wrong way?..

🍋 News drops

📦 Robinhood’s cooking up some new features, and one of them is cash delivery straight to your doorstep. Yup, like ordering a pizza.

🤨 A new poll shows that Argentinians don’t trust President Javier Milei anymore after the LIBRA memecoin scandal. Still, his political party – La Libertad Avanza – is holding strong heading into the next election.

📢 Crypto companies are asking Congress to tell the DOJ to back off. They say the way the DOJ is handling the Tornado Cash case is way over the top – and could put any blockchain dev at risk of getting charged just for building stuff.

⛓ Binance exec Tigran Gambaryan spilled the tea on his 8-month “stay” in Nigeria. He says the government basically held him hostage and used fake charges to try and get something from Binance.

📝 Trump might soon kill off a rule that would’ve made DeFi protocols report to the IRS. The Senate already voted to get rid of it.

🍌 Juicy memes