Following the Bitbuy acquisition, WonderFi has reduced staff by at least 15 to 20 percent.
The cryptocurrency market has been crushed in recent months, amid what has also been a difficult period for technology companies in general.
Vancouver-based crypto firm WonderFi today held a corporate update call explaining how the current environment has affected the company and the steps WonderFi has taken to survive the market downturn and crypto crash. the cryptos.
Company executives also laid out why they think some of the recent activity in the unregulated crypto space, including with Terra and Celsius, could benefit WonderFi in the long run.
WonderFi believes that some of the recent activity in the unregulated crypto space could benefit the company in the long run.
“A lot of the dependencies and exposure to risk that some of the platforms and assets that you’re seeing in the news will be removed [have] … they are again, really further validating our thesis on compatible crypto, doing crypto right,” said WonderFi co-founder and CEO Ben Samaroo.
Listed on the Neo Exchange as ‘WNDR’, WonderFi is trying to build a “compatible crypto ecosystem” encompassing crypto trading, DeFi, NFTs, and gaming. So far it is doing so with the help of subsidiary Bitbuy and Coinberry, which is currently in the process of being acquired. Bitbuy and Coinberry are licensed Canadian crypto platforms.
Beyond cryptocurrencies, rising inflation, interest rates, and geopolitical tensions have led to a broader slump in public tech stocks, hitting publicly traded companies like Shopify and spreading to corporates. private companies like Wealthsimple, which has had a negative impact on valuations and made it more difficult to increase them. capital. WonderFi’s stock price has fallen more than 82 percent in the past six months and is currently trading at $0.30 per share at press time.
Despite this, Samaroo claims the company is “well prepared” for these conditions, citing WonderFi’s balance sheet strength due to some “timely capital increases” and its cash reserves.
Since WonderFi closed its acquisition of Toronto-based crypto trading platform Bitbuy in March, Samaroo said WonderFi has also reduced its staff at the two companies “by 15 to 20 percent.” The company claimed this was in an effort to cut costs and provide shared services in compliance, customer service, product engineering and executive functions.
Approximately 95 Bitbuy employees joined WonderFi’s 25-person team as part of the acquisition deal, bringing the company’s headcount to 125. Samaroo did not share how many people in total were affected by these layoffs.
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According to Samaroo, some of these job cuts were in the works before the market downturn. He added that WonderFi also made some “additional reductions” to his equipment, but did not specify what those reductions were. Samaroo said the company made these moves in light of current market conditions to keep its costs in check as WonderFi works to “ensure all business lines remain cash neutral or better during this bear market.”
WonderFi is far from the only tech company to lay off staff amid this environment, joining the likes of Vancouver-based software firm Thinkific and San Francisco crypto giant Coinbase in an effort to preserve cash in preparation. for what could be a prolonged recession.
According to Bitbuy CEO Michael Arbus, the company has seen declines across the board since early April, following the release of WonderFi’s fiscal second quarter results.
Arbus said that during this time, Bitbuy has seen a sharp drop in cryptocurrency prices, trading activity and volatility, where the company makes its money. “Much of this activity…coincided with a sharp decline in equity markets and, in particular, for riskier assets such as technology, FinTech and digital assets,” he said.
The Bitbuy CEO acknowledged that “the broader crypto market has seen its challenges” recently, adding that the global cryptocurrency market capitalization has fallen from roughly $2.26 trillion to $986 billion as of yesterday, a decline 56 percent in the last two and a half months. .
RELATED: WonderFi to Acquire Coinberry for $38.5M in Stock Deal as Canada’s Crypto Space Continues to Consolidate
Part of this decline has been fueled by the recent death spiral of the algorithmic stablecoin Terra and the freezing of all withdrawals and transfers through CDPQ-backed unregulated US crypto exchange Celsius amid “extreme market conditions.”
Despite tough market conditions and the company’s recent layoffs, Samaroo believes that over time, WonderFi’s “compatible crypto” approach will help differentiate the company and help it win amid a crowded market. . The WonderFi CEO also predicts that the collapse of other unregulated crypto platforms will create additional space for a regulated entity like WonderFi.
“We hope that it will be beneficial as these types of platforms are phased out and that will help make more room for what we are building and what we are focused on,” Samaroo said.
WonderFi backers include famed investor Kevin O’Leary of Dragons’ Den and Shark Tank fame, who has embraced this vision of “compatible cryptocurrencies.”
According to O’Leary, “In WonderFi’s case, you’re buying the picks and shovels, you’re buying the infrastructure, you’re buying the long-term view, regardless of the price that applies to each coin.” He speculated that over time, as bank customers begin to demand access to cryptocurrencies, traditional financial institutions will gravitate toward compatible platforms.
“I think the opportunity for investors, those who can withstand volatility, is extraordinary,” O’Leary said.
Featured image courtesy of WonderFi.