If you've been following crypto news for the last week or two, you've definitely noticed how much doom and gloom is out there. Many media outlets are throwing dark headlines about the current situation. It's something we are used to and maybe got sick of. When times are good, it's easy to see companies, media, and individuals lining up to increase their exposure to crypto in every way, shape, and form. When the bear rears its ugly head, though, things seem to be quite different!
However, there is something that has been spreading and making headlines over the past few weeks for all the wrong reasons. Something that we didn't witness during the 2018 bear market...I'm of course crypto companies firing people!
Dropping employees like a hot potato:
First, we have the "darling" of the crypto industry, Coinbase which announced that it had frozen hiring for the foreseeable future, and what was infinitely worse was the fact it rescinded job offers made to some employees, which means they got sacked before they had the chance to start work!
Coinbase admitted how bitter it was to fire people but it also cited “current market conditions and ongoing business prioritization efforts” as a reason for its decision to pull some job offers.
Another giant who joined the firing party was Gemini which gave the boot to 10% of its staff, saying "crypto winter" is here
"Today is a tough day, but one that will make Gemini better over the long run," the Winklevoss brothers said.
Other participants in the firing craze were the likes of Bitso Exchange and Robinhood which said goodbye to 9% of its work force last April!
All of that suggests only one damn thing and that is we're probably entering into a long and a nasty bear market. One that forces even the most long-established crypto entities to tighten their belts!
Is it really that bad?!
Well, if there is anything we should learn from crypto's short history is that Bitcoin can get sick sometimes but it cannot be dead. Bitcoin is not going to zero. It is just entering a phase of consolidation and it will recover stronger. How long this decline will last is anyone's guess but we shouldn't forget that even in a time like this, there are still big players who are racing against time to increase their ties to crypto and strengthen their positions.
Binance, for example, is reportedly still hiring people around the world in a fanatic race. It also goes further to close a 500M "Fund to Boost Blockchain, Web3, and Value-Building Technologies", reflecting how deep Binance is ready to go in the industry...
FTX is another big exchange that seems to have a good money management as its CEO announced that they would not freeze hiring but "continue growing” during the bear market.
Who is on the right path?
If I had to conclude, I would say that during the 2021 bull market, some exchanges and companies were trying to expand and grow so quickly, hiring more than they could afford and splashing the cash when the going was good. However, once the good times are inevitably gone, they are now forced to back off a bit.
Yes, growth is good but steady and consistent growth is much better, especially when we all know the good times don't last forever.
Companies that have acted responsibly and carefully during a bull market are the only ones that will be able to keep building during a bear market. And as crypto rebalances and consolidates itself in a free-hype environment, those companies that do it right will be the behemoths of the next bull run...
What do you guys think about it?
I'm keen to read your comments and thoughts...
PS, Unless otherwise stated, all images in this post are either my own design or from free photo-sharing sites (e.g. pixabay.com)