Calculations swept through the cryptocurrency industry on Tuesday, with exchange company Coinbase Global Inc saying it would cut nearly a fifth of its staff and the crypto lender.
Network LLC hires a law firm to investigate restructuring options.
Coinbase, one of the signal growth companies of the crypto boom, said it was slashing its workforce by 1,100 employees, or about 18% of its workforce, as the company grew too quickly and a potential recession was “another crypto.” Could cause winter.”
In a letter to employees“Our employee costs to effectively manage this uncertain market are too high,” Chief Executive Brian Armstrong said.
“It appears we are entering a recession after a 10+ year economic boom,” wrote Mr. Armstrong. “Recession could lead to another crypto winter and last longer. In the last crypto winter, trading revenues[हमारा सबसे बड़ा राजस्व स्रोत]There has been a significant drop in that.”
Meanwhile, Celsius, one of the largest crypto lenders, tapped lawyers from the law firm Akin Gump Strauss Hauer & Feld LLP to advise them on solutions to its growing financial problems, people familiar with the matter said. Celsius told users on Sunday night that it was halting all withdrawals, swaps and transfers between accounts due to extreme market conditions, causing further volatility in cryptocurrency prices. A spokesman for Akin Gump did not immediately comment. Celsius officials did not immediately respond to requests for comment.
The destruction in crypto markets has been widespread and profound, eroding nearly $2 trillion in value across several cryptocurrencies since November, when bitcoin—the most mainstream of them all—reached an all-time high of $67,802.30.
Investors continue to offload assets deemed risky. like cryptocurrency and technology stocks, while the Federal Reserve tries to contain the most inflation in the US in decades. S&P 500 Stock Index entered a bear market this week as investors The Fed is expected to raise interest rates further,
As of 5 p.m. ET Tuesday, bitcoin is trading at $21,991.89, down 5.4% from that day and 68% from its all-time high. Dogecoin, a cryptocurrency that started as a joke but became established enough to be mentioned
On “Saturday Night Live,” it peaked at 67.4 cents in May 2021 and has since crashed by 92%.
Coinbase, the largest cryptocurrency exchange in the US Have struggled to keep users hanging as of this year The frenzy in digital assets cools and market have become rocky, In May, Coinbase said it lost hundreds of millions of dollars in its first quarter because of a sharp drop in its trading fees. The number of users transacting on Coinbase also declined, and the company said it expects trading volumes and users to drop again in the second quarter.
Since the income report, Things Have Turned Worse for Cryptocurrency PricesCoinbase stock and market in general,
Coinbase’s IPO last year was considered a turning point for the crypto industry, which began a decade ago as an experiment in digital currency. Some appreciated its launch in the same way as other field-setting companies, such as Netscape, went public in the 1990s. When Coinbase — which says it is “remote-first” and does not maintain headquarters — went public, its stock was first traded at $381, and shares soared to $429.54. On Wednesday, it closed at $51.58.
The WSJ’s Dion Rabouin explains why Wall Street is betting big on crypto now and what this means for the new asset class and its future. Photo Composite: Elizabeth Smelov
Last week, Mr. Armstrong criticized a petition by Coinbase employees to remove certain executives from the company, which did not include Mr. Armstrong, because “the executive team has recently been making decisions that are not in the best interest of the company.” , its employees and its shareholders.”
in june 10
In the thread that spanned 16 tweets, Mr Armstrong said, “If you have no confidence in a company executive or CEO why are you working at that company? Quit and find a company you trust! “
Coinbase said it expects to have 5,000 employees following the layoffs and that laid-off employees will receive at least 14 weeks of severance pay.
Other crypto-focused companies have recently announced layoffs as crypto prices have plummeted. BlockFi, a crypto trading and lending platform, said on Monday that it will reduce its head count by 20% as it said “the macroeconomic environment has changed dramatically.”
The CEO of Crypto.com, the company that recently renamed itself to the area of the Los Angeles Lakers and ran a Super Bowl ad featuring LeBron James, said his firm was “targeting” about 5% of its workforce, or 260. cut”. Jobs. Earlier in June, crypto exchange Gemini Trust Company cut 10% of its workforce, citing the effects of a market downturn.
The layoffs come after a hiring boom as the crypto increased in value. According to data collected by, the hiring of crypto firms had doubled from November to April.
—Caitlin Ostroff contributed to this article.
write to Nathan Baker nathan.baker@wsj.comSoma Biswas At soma.biswas@wsj.com and Alexander Gladstone alexander.gladstone@wsj.com
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