Bitten by the downturn in the digital asset market, Crypto.com is laying off staff. The leading crypto exchange has joined its counterpart Gemini and Coinbase in sending employees homes. This is a begrudging reaction to a beaten-up digital asset market that has been drastically hit by the rising inflation and the ongoing Russo-Ukraine war.
A spokesperson for Crypto.com said the exchange had recently made the difficult decision of targeted reductions – 5% of its workforce, that it 260 employees were laid off. The spokesperson said Crypto.com remains focused on shoring up product and engineering capabilities and sponsoring professional sports teams. The firm had signed up Lebron James as the face of its advertising efforts.
No one knows how long this “crypto winter” will be, but some believe it may be from six to 12 months. While some say, it may go on for two years. The layoffs is a mitigation move. The crypto industry saw a pick-up in the workforce when the sector was thriving and moving upward. Now, it’s feeling the bite of the downturn.
Sources say the downturn in the crypto market suggests that the years-long effort by liquidity providers to diversify revenue streams away from spreads on trading fees has yet to bear ample fruit. Besides macroeconomics, crypto exchanges have been racing for customers by lowering fees. And firms are very much dependent on trading fees, and it’s a hard income stream to get away from.
Moreover, institutional investors from the world of stocks and bonds, and commodities have taken a liking to cryptocurrencies. And they are serious about it. They are dedicating time and resources to get up to speed. One investor highlighted that it’s brutal that the digital asset market is flashing red, that too when many have finally started to take the sector seriously. However, investors are hopeful of a swift bounce back.