The difficult time going through the cryptosphere is not about to go away.
Judging by the recent decisions announced by the big names in the industry, it is even logical to say that what industry sources call “cryptographic winter” will continue for several more weeks, at least, even if volatility is the key word in space.
The latest episode of “Cryptographic Winter” lasted from 2018 until the fall of 2020 before prices soared and skyrocketed to historic highs in 2021.
Coinbase (CURRENCY) , the most popular of the digital currency trading platforms in the US, has just announced new cost-saving measures. These include indefinite suspension of employment. Worse, the firm will cancel certain job offers made to candidates.
“In response to current market conditions and ongoing business prioritization efforts, we will extend our hiring break for both new and filling roles in the foreseeable future and terminate a number of accepted offers,” said LJ Brock, Chief of Staff, in a blog. publication on June 2nd.
“It has become clear that we need to take more stringent measures to curb the growth of our staff,” Brock added. “Adapting quickly and acting now will help us navigate successfully in this macro environment and come out even stronger, which will allow for greater healthy growth and innovation.”
The extended hiring break does not include functions related to security and compliance, the company said.
As for the cancellation of accepted job offers, Coinbase said it will apply to “people who have not yet started.”
“Coinbase will be stronger”
“We’ve always known that cryptography would be volatile, but that volatility along with bigger economic factors can test the company and us personally in new ways. If we’re flexible and resilient and stay focused in the long run, Coinbase will come out stronger. side, “Brock concluded.
The challenges the executive is talking about are linked to fears of an economic downturn. These fears have led many investors to liquidate risky assets, such as cryptocurrencies.
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Recent scandals, such as the collapse of the UST and Luna currencies, have also reminded investors that the industry is still new and therefore subject to many ups and downs.
The cryptocurrency market has lost more than $ 1.7 trillion in value since November.
The price of Bitcoin is down 57% since its all-time high of $ 69,044.77 reached on November 10th. The king of cryptocurrencies is now trading at around $ 29,846.33 in the latest check, according to data firm CoinGecko.
Ether, the second-largest cryptocurrency in terms of market value, is worth 64% less than when it broke its $ 4,878.26 record on November 10th. It currently trades at around $ 1,780.06.
As for Coinbase, its market capitalization has fallen by more than $ 48 billion since January, while shares have lost about 74% of their 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 took center stage after they and a classmate claimed Mark Zuckerberg stole his idea for Facebook.
“We ask team leaders to make sure they focus only on products that are critical to our mission and to assess whether their equipment is the right size 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 made the difficult but necessary decision to part with about 10% of our workforce.”
The cryptographic revolution is underway and its impact will remain profound. But his trajectory was anything but gradual or predictable. Its path can best be described as punctuated equilibrium: periods of equilibrium or stasis that are marked by dramatic moments of hypergrowth, followed by strong contractions that are established in a new equilibrium that is higher than the previous one.
“This is where we are now, in the phase of contraction that is settling into a period of stagnation, what our industry calls ‘cryptographic winter.’
This is the first time Gemini has cut jobs. The company employs 1,033 people, according to PitchBook, and was valued at $ 7.1 billion in its latest round of financing. A 10% reduction would therefore mean the dismissal of just over 100 people.