Cryptocurrency companies have laid off thousands of employees in recent weeks as they continue to manage the aftermath of last year’s bear market in digital coins and tokens.
A little more than one month into 2023, and leading crypto companies such as Gemini Trust, the British-based Luno exchange, and Singapore cryptocurrency lender Matrixport Technologies have announced hundreds of job cuts.
Those cuts follow other ones announced at Blockchain.com, which is letting go of 28% of its workforce; Chainalysis, a specialist in tracking cryptocurrency transactions, which is laying off 5% of its staff; and Coinbase (COIN), which announced in early January that it is eliminating 950 employees, or 20% of its workforce, and closing most of its operations in Japan.
Non-fungible token (NFT) marketplace SuperRare reduced its headcount by 30% in January as the market for digital collectibles also suffered through a downturn over the past year.
Higher interest rates and recession risks are spurring a range of sectors to retrench, notably high-tech companies. More than 30,000 positions were lost in January in the U.S. technology industry at firms ranging from Microsoft (MSFT) to Amazon (AMZN).
Ironically for the cryptocurrency industry, the job cuts come as prices for digital assets rebound strongly to start the year. The price of Bitcoin (BTC), the largest cryptocurrency by market capitalization, has risen nearly 40% so far in 2023 to trade near $24,000 U.S.
Bitcoin had fallen more than 60% in 2022 and was trading below $16,000 U.S. last December following the $8 billion U.S. collapse of crypto exchange FTX.
With cryptocurrency prices now on an upswing, some analysts say it likely won’t be long before companies are forced to reverse course and begin hiring staff again following the current period of retrenchment.
