When the crypto markets melted down this spring following the collapse of the Terra stablecoin, layoffs followed soon after as marquee companies like Coinbase and OpenSea slashed their workforces by 20% or more. By autumn, it felt as if the worst had passed, but in recent weeks the bloodletting has begun anew.
On Tuesday, longtime derivatives exchange BitMex cut 30% of its staff, while news emerged that Galaxy is exploring cuts of 20% and conglomerate DCG will shrink by 10%. This comes two weeks after it emerged that cuts at Crypto.com—which produced the infamous Matt Damon ad—were deeper than the company had let on—about 2,000 people, 30% to 40% of its workforce.
This is nothing to cheer about, even for those who despise the crypto sector. Most of those losing jobs are not the rich and obnoxious bros who give the sector a bad name, but instead everyday people who worked in sales, marketing, and customer support. Being laid off can be not only a financial blow but a shattering personal experience, especially at a time when the economy is teetering on recession.
But for the broader crypto industry, it’s hard not to think that some good will come from these layoffs. That’s because too many companies grew fat off the sugar highs of the 2021 bull run, spending recklessly while failing to improve their products and customer experience. Instead of making crypto more accessible to ordinary consumers, they blew millions on TV ads and naming sports stadiums. One wonders how the Crypto.com CEO feels right now about his decision to drop $700 million on renaming the Staples Center in Los Angeles.
Meanwhile, some of the layoffs underscore how onetime industry pioneers are becoming irrelevant as they’re eclipsed by newer titans like FTX and Binance. In the case of BitMex, the exchange was once the biggest player in the derivatives market but now holds only a 2% market share. It’s hard to see how the company claws back that lost ground, or how other faded stars from crypto’s early days like Blockchain.com or Gemini can make a comeback. Ultimately, the lessons of Crypto Winter are cruel but necessary, and show how the crypto industry is subject to the same forces of creative destruction as everywhere else.
(Special note: I will be hosting a Twitter Spaces from the @fortunemagazine account at noon ET today to discuss Elon Musk with a former Twitter exec who is now CMO of Haun Ventures. Come drop by!)
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
A Harris poll commissioned by Grayscale on popular attitudes toward crypto found that 33% of adults younger than 44 think crypto is a good place to put money, while only 13% of older people did. (Forbes)
A Charles Schwab survey about 401(k) accounts found that nearly half of Gen Z and millennial employees would like the option to invest part of their retirement savings in crypto. (CNBC)
Dozens of new dog-related cryptocurrencies appeared after Elon Musk tweeted a Shiba Inu pic on Halloween; nearly all lost 90% of their value in a day. (Coindesk)
Digital Currency Group promoted COO and longtime exec Mark Murphy to president as part of its restructuring efforts. (The Block)
MoMA will host a display by an artist who sells his work as NFTs while the Guggenheim is hiring a new curator for digital art—part of a trend in which museums are leaning into digital and crypto art. (New York Times)
Back in the day:
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