The ongoing downward trend in both the digital and traditional financial markets had a detrimental effect on key cryptocurrency companies like Coinbase, BlockFi, and others.
In order to survive and carry on with business, corporations were forced to reduce their workforce.
The new research of Addictive Tips with data from LinkedIn and Layoffs revealed that Coinbase (COIN) and BlockFi are among the digital and financial companies that have been most negatively impacted. In 2022, the industry lost roughly 28,000 jobs as the U.S. GDP shrank by 1%.
The decline in the cryptocurrency market has been severe, with the biggest cryptocurrencies losing around 80% and 85% of their value from their all-time high in 2021.
Bitcoin and Ethereum, which once priced at $69,000 and $4,500, respectively, are now worth only $19,600 and $1,400 each.
As a result of a significant bull run into their current all-time highs, Bitcoin, Ethereum, and other cryptocurrencies were able to attain a total market capitalization of about $3 trillion.
The overall value of the cryptocurrency industry fell to a yearly low of about $700 billion in 2022.
As per the report, this has led to significant layoffs in many industries. With the declaration of the COVID-19 pandemic and the implementation of lockdown measures in March 2020, this trend started. At that time, Bitcoin dropped to $3,000, reaching a multi-year low.
However, 2022 saw a new wave of layoffs as central banks rushed to curb inflation by raising interest rates, tightening credit, and negatively harming important economic metrics.
Coinbase has lost 18% of its employees and BlockFi has lost 20%.
This leads to a total loss of 1,350 jobs across both companies, with the crypto exchange suffering the most hit.
The firm was the most negatively impacted in the finance industry for Q2 of 2022 with 1,100 staff members layoffs.
With a combined total of 600 layoffs over the same time period for a 29% fall in their workforce, only BlockFi and Robinhood come close. Regarding the causes of this poor performance, the report stated:
“Fintech businesses including Coinbase, Robinhood, and BlockFi recently taken a big hit. These three businesses deal with either equities or cryptocurrencies, both of which have experienced a large decline recently as a result of worries about a coming economic recession. These downturns have had a significant impact on business for these firms and resulted in layoffs, which was a tremendous surprise for businesses that had performed well in recent years despite a global pandemic.”
Should investors start considering a potential bottom in the sector with the severe layoffs at Coinbase, BlockFi, and other significant cryptocurrencies, the bankruptcy of others, and with larger cryptocurrencies are down 80% from their all-time high?
As per the Ecoinometrics report the regular market and the crypto market, as measured by Bitcoin and Ethereum, may yet see some pain in the near future. T The assets are still some distance off their recent lows.
Barron’s report shows that significant investors are reportedly buying up Coinbase shares now, perhaps in anticipation of the next bull run. According to the media site, Tobi Lutke, the CEO of Shopify, bought up to $3 million worth of COIN. at the time of writing, Coin price was trading at $66.35.
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