It is a never-ending nightmare for investors who had huge stakes in the crypto market, as there seems to be no end in sight to the cryptocurrency crash that began in early May. The situation has sent governments and large financial institutions scrambling to cover their losses, and now there is talk of new legislation on the horizon.
Indeed, even the biggest supporters of crypto have begun to air some concerns as the situation worsens day by day, with people’s very livelihoods now on the line. It seems that even the employees of some of the biggest cryptocurrency companies are now faced with the very real possibility of losing their jobs.
Coinbase To Lay Off 20% of Its Staff
Yet another blow has been dealt to the digital assets market, and this one has sent chills down the spines of crypto investors. Coinbase, one of the biggest players on the virtual market scene, and a shining example of the huge economic potential of cryptocurrency has put in place plans to lay off a staggering 20% of its employees.
To put the enormity of this move into perspective, Coinbase is so large that letting go of 20% of its staff translates to 1,100 employees losing their jobs! This news does not come as a shock to anyone who has been following Coinbase in the last few weeks, especially after they announced some days ago that they would no longer be offering new jobs due to the current market conditions.
In an attempt to calm the waters, Coinbase CEO Brian Armstrong said this drastic move by his company was an attempt to “stay healthy during this economic downturn.” Such a statement, though, seems like a huge understatement from a company that is about to lay off a fifth of its staff.
When making the announcement on Tuesday, 14th of June, Armstrong conceded that the responsibility of this decision lay with him, but also attributed the current situation that Coinbase finds itself in, to the way the company grew too quickly. He said that while the management had tried its best, it had become exceedingly clear that they had over-hired, and this was only compounded by the downturn in crypto trading.
Other Companies Also Cutting Staff
Coinbase is not the only organization that is taking the same decision, though, with other well-known crypto companies also doing the same. In fact, two very big names have announced that they also intend to cut jobs to survive this rough period.
On Monday, the crypto lending company BlockFi Inc. said it would be letting go of 20% of its workers, while another giant, Crypto.com will lay off an initial 5% of its staff.
In a recent newsletter addressing the issue of the market slump and job losses, Mati Greenspan, founder of the crypto analysis firm Quantum Economics, said the situation was very bad, not only for those invested in these coins but also for the industry as a whole. He added that it has been a “very brutal bear market,” with very little optimism right now.
A Select Few Have Been Spared
While the rest of the world is struggling to absorb the financial impact of the crypto crash, it seems not everyone has been affected in the same way. El Salvador, for example, claims it has not suffered the same as other nations have.
Speaking at a recent press conference, the Minister of Finance of El Salvador, Alejandro Zelaya, said that the country had not lost $40 million on Bitcoin assets, as was being suggested by the media.
In defense of the decisions made by his ministry, Zelaya said any criticism should be directed at Bitcoin, not at the Nation’s finance strategy. Any suggestions of high fiscal risks were, according to him, quite laughable, and the overall risks they took were “extremely minimal.”
All in all, there has been no improvement on the digital assets front, with the situation remaining dire. The recent plans to lay off employees by some tech giants, such as Coinbase and Crypto.com, only serve to bring home the full extent of the trouble that the crypto industry finds itself in.
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