In June 2022, the cryptocurrency market dropped below the $1 trillion mark —$890 billion at the time of writing. This is the first time since January 2021 that the market goes below the trillions. Several cryptocurrency companies, especially exchanges, are feeling the pain of the ongoing bloodbath in the market and have decided to downsize their staff in order to prepare for the upcoming crypto winter.
Coinbase Slashes 18% Of Staff
On June 14, leading US crypto exchange Coinbase announced cutting almost 20% of its staff due to the current market downturn.
CEO Brian Armstrong took to Twitter on Tuesday to announce that employees affected by the decision would receive an email notifying them that they no longer have access to Coinbase systems. This was “the only practical choice —said Armstrong in a letter— to ensure not even a single person made a rash decision that harmed the business or themselves.”
Overall, Coinbase’s decision of slashing 18% of its workforce comes after encountering financial turmoil; Coinbase shares have fallen dramatically by 3/4 during the first months of 2022, and the firm reported a $430 million loss in its Q1 financial report.
During that period, Coinbase went on a massive hiring spree during the extent of the bullish market and also spent millions of dollars on advertisements. “We need to be more mindful of costs as we head into a potential recession,” Armstrong tweeted.
1/ Today I shared that I’ve made the difficult decision to reduce the size of our team at Coinbase by about 18%. The broader market downturn means that we need to be more mindful of costs as we head into a potential recession.
— Brian Armstrong – barmstrong.eth (@brian_armstrong) June 14, 2022
Besides reducing its headcount, Coinbase also rescinded several accepted job applicants before they could start their roles. In the letter, Armstrong said that affected individuals would be connected with open positions at other crypto firms through the recruitment platform Talent Hub.
Crypto.Com, BlockFi, Gemini Joining the Firing Wave
Coinbase wasn’t the only company slashing its headcount. The crypto market’s rocky conditions, combined with a seemingly US economy being dragged into a recession period, have made several well-known crypto companies reconsider costs and reduce work staff.
Singapore-based crypto exchange Crypto.Com was one of the most active firms in the space throughout 2021 and early 2022, going all out on sponsorships, buying NBA stadium rights, and hundreds of millions in advertisements.
In March, the firm paid $700 million to become an official crypto sponsor of the FIFA World Cup Qatar 2022 and paid Matt Demon $100 million to become its brand ambassador and promote the exchange in a Super Bowl Commercial. On June 10, CEO Kris Marszalek announced the firm laid off over 250 employees or roughly 5% of its workforce.
Before Crypto.com, Winklevoss-led Gemini announced reducing 10% of its workforce, while BlockFi reduced its headcount by over 20%. Crypto companies in Latin America are downsizing too, with Bitso —Mexico’s largest exchange— firing over 10% of its staff and Argentinian BuenBit reducing almost half of its workforce.
Hopium: Bitcoin and Kraken On Hiring Spree
While most companies are joining the firing fever, Binance announced they have 2000 open roles, from data research, communications, business development, and more.
It was not easy saying no to Super bowl ads, stadium naming rights, large sponsor deals a few months ago, but we did.
Today, we are hiring for 2000 open positions for #Binance. pic.twitter.com/n24nrUik8O
— CZ 🔶 Binance (@cz_binance) June 15, 2022
And Kraken has over 500 roles to fill this year.
What does it all mean? It’s time to get back to building! We’ve got 500+ roles still left to fill this year. Bear markets are the best for recruiting talent that is both aligned with our culture and our mission. Check out Kraken Culture Explained for more.https://t.co/sMbiL1Gpwi
— Kraken Exchange (@krakenfx) June 15, 2022
Changpeng Zhao, CEO of Binance, said the firm has kept on growing despite market conditions and low trading volume from retail investors, mostly thanks to not spending millions of dollars on massive advertisement boards or buying sports stadium rights like other crypto companies. “If we are in a crypto winter, we will leverage that, we will use that to the max,” he said in an interview.
Both Binance and Kraken believe bear markets are great opportunities to build, grow and make businesses.
“It’s once again time to build. It’s time to remember why we’re doing this: The Mission of bringing financial freedom and inclusion to the billions of people suffering from financial exclusion, hyperinflation, and a broken system that disproportionately leaves the poor out in the cold.” Reads a blog post from Kraken.
In early May, Binance was a member of the 18 equity investors who backed Elon Musk on his bid to take over Twitter. Changpeng Zhao called it “a small contribution to the cause.”
But Crypto is Dead (Again), Says the Media
Crypto companies downsizing amid harsh market conditions is not uncommon. In 2019, several well-known startups, exchanges and related companies such as Circle cut a slice of their workforces in order to focus on growth and product development.
Naturally, corporate media is declaring Bitcoin and crypto dead (again) although this time with less frenziness. The same headlines from 2016, 2018 and 2019 are appearing again in 2022, but with a small spin, adding a “but why” at the end or asking crypto experts and digital asset managers for their opinions on the market.