Crypto’s Wave of Layoffs Is Just Beginning, Experts Warn

TMany companies are cutting their workforces due to the crypto crash, but a few others are increasing their investments.

On June 14, Coinbase, the first crypto company to enter the Fortune 500, announced that it was laying off 18% of its workforce—that means shedding about 1,100 full-time roles. In a blog post, CEO Brian Armstrong wrote that the company was planning “for the worst,” including for the likelihood of a “crypto winter” that “could last for an extended period.”

Robinhood and are just a few of the companies that have made significant hiring freezes. Some longtime experts say they’re getting flashbacks to 2018, when crypto startups laid off dozens of employees and the industry lay dormant for a couple of years. This could signal a prolonged crypto downturn that will lead to major shifts. It could take many years for a rebound to occur.

“You’re probably looking at a tough period of at least a year or two where there’s a lot of crypto space that will be in limbo,” says Edward Moya, a senior market analyst at Oanda.

But other companies say that they’re sticking to their game plans of steady growth to prepare for the next bull period. “Because we hired carefully, we can keep growing regardless of market conditions,” FTX CEO Sam Bankman-Fried wrote on TwitterLast week. “Sometimes, when others Zig, you Zag.”

Here’s why both trends are happening, and what they say about crypto’s future.

A rapid downfall

For months, industry experts have been warning of a downturn. The history of crypto is filled with booms and busts. However, many industry analysts have warned that it could be a downturn. Numerous companies have taken preventative steps to avoid a possible pullback. These include building war chests and choosing safer investments.

But even though many were expecting it, the speed of crypto’s collapse this week took many by surprise. In three days, Bitcoin lost 25% of its value while Ethereum fell by 35%. “If you compare this to previous bear markets, this happened very fast,” says the macro-economist and Web 3 educator Tascha Che. Because of increased crypto investment and capital, she believes the 2018 downturn will be more mild than previous ones.

But companies weren’t prepared for “the combination of shocks” that all happened at once, Che says. The Federal Reserve’s raising of interest rates caused investors to move their money out of riskier bets like crypto. Russia’s invasion of Ukraine exacerbated inflation and supply chain issues. In May, Terra’s ecosystem was destroyed. This week the situation got worse. As too many investors attempted to cash in simultaneously, Celsius, the crypto lender stopped withdrawing. This caused panic throughout the sector. “It was surprising just to see the domino effects of Luna, and now Celsius, collapsing so quickly,” says Ori Shimony, the co-creator of the Web 3 software development company dOrg. “There’s concern that anything could go next.”

Continue reading: Here’s Why Bitcoin and Other Cryptocurrencies Keep Crashing

Companies that grow the fastest are the most likely to be the best-performing. Coinbase became the main entry point for crypto-savvy newcomers last year, and went public. In February alone, Coinbase had announced that it would hire 2000 employees. Today, the stock of its company is valued at 15% less than it was in November. “We grew too quickly,” CEO Brian Armstrong wrote in his blog post on Tuesday. “It is now clear to me that we over-hired.”

The newly laid-off Coinbase staffers join the rapidly growing ranks of crypto’s recently unemployed. Kris Marszalek (CEO of, was fired last week. announced layoffsAbout 260 people, or about 5% of the company’s workforce. The company spent an estimated $700million to name the Staples Center Los Angeles. Gemini, a cryptocurrency exchange run by the Winklevoss brothers, fired nearly 10% of their employees. Bitso was the second-largest Latin American cryptocurrency exchange, announcing late last month that 80 people would be laid off.

“Everyone was ramping up staff in expectation that we would see steady growth across the space,” Moya says. “That hasn’t played out.”

A murky future

Experts say those who expect a quick recovery may be disappointed. However, the economic outlook is still bleak and fears of recession are growing. According to the economist Peter Schiff wrote on Twitter on Tuesday that “this is likely just the first round of layoffs, and a harbinger of many more to come throughout the crypto ecosystem and beyond.”

Che agreed with him. “We are in the middle of a bear market: there’s no end in sight right now,” she said. “We will probably see more layoffs coming.”

Moya believes that there will be a hiring freeze and that the flow of venture capital into this space will slow down. “There’s this fear that crypto’s growth will be a slow grind and not some of the rapid appreciation we’ve seen recently,” he says.

There is hope!

Experts believe that crypto is not yet dead, despite the dire short-term outlook. For one, there’s still an immense amount of money circulating. Shimony says his company, dOrg, which builds software and tech for Web 3 companies, is still receiving a steady flow of assignments from “good projects still have millions, if not hundreds of millions, of stablecoins in their war chests. They’re going to keep us on their expenses for a while, as long as we’re useful to them.”

Shimony claims that crypto companies have been able to stay on a steady footing because stablecoins are more reliable than Ethereum and Bitcoin. They are meant to keep their value at a dollar. In 2018, he says, “when people were selling their ETH, there was a death spiral, so you had a wave of projects failing. Now, the industry is way more mature.”

Shimony believes that crypto projects can learn from volatility and shift from getting-rich-quick schemes to prioritize slower growth projects with clearer consumer value. “There was a lot of nonsense floating around: derivatives on derivatives, forks on forks, NFT madness: these circular models that don’t actually create new value, but just kind of shuffle it around,” he says.

DOrg, Shimony says, was born in the bear market of 2018, giving the company “an awareness that times won’t always be good.” He says that in the last year, dOrg made the conscious decision to slow its hiring, avoid big expenditures, grow its treasury, and take part in more meaningful projects. He hopes that the crypto winter, which he says will reorient the industry in the same way as the previous one, can help. “If crypto was 99% speculation and 1% utility in 2018, now maybe it’s 85% speculation and 15% utility,” he says. “We’re getting there.”

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