Since its peak in November, the crypto market has experienced a major downturn. The industry lost approximately $2 trillion.
Many crypto exchanges are experiencing difficulties following the Federal Reserve’s earlier in the year increase in interest rates to reduce inflation.
Since risky assets have become less attractive to investors, they include cryptocurrenciesMajor crypto companies, such as Coinbase, have announced layoffs. Coinbase had seen a dramatic increase in its size during the bull markets.
According to the Wall Street Journal, more than 1,800 job reductions have been announced by cryptocurrency companies since June. The job cuts have created uncertainty in the once-expanding crypto industry.
These are some of the most prominent companies that have carried out layoffs in recent weeks:
Gemini
Cameron Winklevoss, co-founders of Gemini, stated in a blog post on June 2 that approximately 10% of the company’s workforce would be laid off.
Crypto.com
On June 10, Kris Marszalek, CEO of Crypto.com, said about 5% of its workforce would be part of the “targeted reductions”, or 260 jobs would be removed.
During the crypto bull market, Crypto.com spent $700 million to put its name on the Los Angeles Lakers’ arena. LeBron James was also featured in a Super Bowl commercial.
BlockFi
BlockFi, a crypto trading and lending platform, announced that it would be reducing its workforce by 20% on June 13. The company blamed the drastic shift in the macroeconomic climate for the layoffs.
BlockFi’s CEO Zac Prince tweeted that the company had risen to over 850 employees in mid-June, from 150 at the close of 2020.
BlockFi has reached a deal to continue its business with crypto exchange FTX. The agreement includes a $400m credit line and the option to purchase up to $240 million.
Coinbase
Coinbase, a cryptocurrency exchange, announced on June 14 that it would be slashing 1,100 employees or 18% of its workforce. According to the WSJ Coinbase is the only growth firm in the crypto boom. Chief Executive Brian Armstrong said, “our employee costs are too high to effectively manage this uncertain market.”
According to FactSet data, Coinbase shares have plummeted more than 71% in the past year.
Compass Mining
Compass Mining posted a blog entry on July 7 stating that 15% of their workforce would be laid-off. Compass Mining also announced that executive compensation would be cut.
According to the bitcoin mining company, their business “grew too quickly” but had to cut spending now due to uncertain market conditions.
OpenSea
On July 14, nonfungible tokens (NFTOpenSea, a ) marketplace announced it was cutting a fifth its staff. Employee layoffs were attributed to the fall in cryptocurrency prices. OpenSea reports that it has now 230 employees. This means that approximately 57 people were laid-off.
Blockchain.com
Blockchain.com, a cryptocurrency exchange, announced on July 21 that it would be laying off one quarter of its workforce. Three Arrows Capital, a collapsed crypto hedge-fund manager, had taken credit of more than $300,000,000 from this trading platform.
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