The cryptocurrency market has been struggling since the beginning of the year.
The tough time that the crypto sphere is going through is not about to go away.
Judging by the recent decisions announced by the big names in the sector, it is even logical to say that what industry sources call “crypto winter” will continue for several more weeks, at least, even if volatility is the key word in the space.
The last episode of “crypto winter” lasted from 2018 to fall 2020 before prices rebounded and soared to record highs in 2021.
Coinbase (COIN) , the most popular of American digital currency trading platforms, has just announced new cost-saving measures. These include an indefinite suspension of hiring. Worse, the firm will rescind certain job offers made to candidates.
“In response to the current market conditions and ongoing business prioritization efforts, we will extend our hiring pause for both new and backfill roles for the foreseeable future and rescind a number of accepted offers,” L.J Brock, chief people officer, said in a blog post on June 2.
“It’s become evident that we need to take more stringent measures to slow our headcount growth,” Brock added. “Adapting quickly and acting now will help us to successfully navigate this macro environment and emerge even stronger, enabling further healthy growth and innovation.”
The extended hiring pause does not include roles that are related to security and compliance, the company said.
As for the cancellation of accepted job offers, Coinbase said this will apply to “people who have not started yet.”
‘Coinbase Will Cone Out Stronger’
“We always knew crypto would be volatile, but that volatility alongside larger economic factors may test the company, and us personally, in new ways. If we’re flexible and resilient, and remain focused on the long term, Coinbase will come out stronger on the other side,” Brock concluded.
The challenges of which the executive speaks are linked to fears of a recession in the economy. These fears have prompted many investors to liquidate risky assets, such as cryptocurrencies.
Recent scandals, such as the collapse of the UST and Luna coins, have also reminded investors that the industry is still young and therefore subject to many ups and downs.
The crypto market has lost over $1.7 trillion in value since November.
The price of Bitcoin is down 57% from its all-time high of $69,044.77 reached on Nov. 10. The king of cryptocurrencies is now trading around $29,846.33 at last check, according to data firm CoinGecko.
Ether, the second crypto in terms of market value, is worth 64% less than when it broke its record high of $4,878.26 on Nov. 10. It’s currently trading around $1,780.06.
As for Coinbase, its market capitalization has shrunk by more than $48 billion since January, while the stock has lost about 74% of its value to $66.69 as of June 3.
‘We Are Not Alone’
Gemini, another platform for buying and selling cryptocurrencies, is also reducing costs. And that means job cuts. The firm was founded in 2014 by twin brothers Cameron and Tyler Winklevoss, who came to prominence after they and a classmate claimed that Mark Zuckerberg stole their idea for Facebook.
“We have asked team leaders to ensure that they are focused only on products that are critical to our mission and assess whether their teams are right-sized for the current, turbulent market conditions that are likely to persist for some time,” Cameron and Tyler wrote in a blog post. “After much thought and consideration, we have made the difficult but necessary decision to part ways with approximately 10% of our workforce.”
The crypto revolution is well underway and its impact will continue to be profound. But its trajectory has been anything but gradual or predictable. Its path can best be described as punctuated equilibrium — periods of equilibrium or stasis that are punctuated by dramatic moments of hypergrowth, followed by sharp contractions that settle down to a new equilibrium that is higher than the one before.”
“This is where we are now, in the contraction phase that is settling into a period of stasis — what our industry refers to as “crypto winter.” This has all been further compounded by the current macroeconomic and geopolitical turmoil. We are not alone.”
This is the first time Gemini has cut jobs. The firm employs 1,033 people, according to PitchBook, and was valued at $7.1 billion in its last funding round. A 10% reduction would therefore amount to laying off a little more than 100 people.