Coinbase Lays Off 18% Of Its Workforce, Warns Of ‘Crypto Winter’

Cryptocurrency exchange Coinbase is laying off 18% of its employees as the digital currency market continues to unravel. CEO Brian Armstrong said in an open letter Tuesday that the “difficult decision” to lay off some 1,000 employees was made to ensure that “we stay healthy during this economic downturn.” The exchange has more than 4,900 employees, according to its website. Armstrong warned of an impending economic downturn that could extend the latest crypto bear market. “It appears that we are entering a recession after an economic boom of more than 10 years,” Armstrong wrote. . “A recession could lead to another crypto winter and could last for an extended period.” Although Armstrong said future economic conditions are difficult to predict, the company plans “for the worst so we can operate the business in any environment.” Coinbase’s market value has imploded as investors continue to sell off cryptocurrencies, bailing out risky assets in anticipation of sharp increases in interest rates to tackle inflation. Bitcoin reached an all-time high of $69,000 in November 2021. Since then, the world’s most valuable cryptocurrency has lost two-thirds of its value, falling below $23,000 on Tuesday. It has lost about 25% of its value since Friday. Meanwhile, shares of Coinbase are down about 80% this year and 85% since its initial public offering in April 2021. The company, once worth almost $100 billion, is now worth less than $12 billion. In his blog post, Armstrong admitted that Coinbase “grew too fast” as cryptocurrency trading skyrocketed in early 2021. “contracted,” he said. Other market players are also struggling. Celsius Network, a major cryptocurrency lender. cryptocurrencies, said on Monday that it would suspend all withdrawals and transactions due to “extreme market conditions.” Anna Cooban of CNN Business contributed to this report.

Cryptocurrency exchange Coinbase is laying off 18% of its employees as the digital currency market continues to unravel.

CEO Brian Armstrong said in an open letter Tuesday that the “difficult decision” to lay off some 1,000 employees was made to ensure that “we stay healthy during this economic downturn.” The exchange has more than 4,900 employees, according to its website.

Armstrong warned of an impending economic downturn that could extend the latest bear market in cryptocurrencies.

“It appears that we are entering a recession after an economic boom of more than 10 years,” Armstrong wrote. “A recession could lead to another crypto winter and could last for an extended period.”

Although Armstrong said future economic conditions are difficult to predict, the company plans “for the worst so we can operate the business in any environment.”

Coinbase’s market value has collapsed as investors continue to sell off cryptocurrencies, bailing out risky assets in anticipation of sharp interest rate hikes to tackle inflation.

Bitcoin reached an all-time high of $69,000 in November 2021. Since then, the world’s most valuable cryptocurrency has lost two-thirds of its value, falling below $23,000 on Tuesday. It has lost about 25% of its value since Friday.

Meanwhile, Coinbase shares are down 80% this year and 85% since its initial public offering in April 2021. The company, once worth almost $100 billion, is now worth less than $12 billion.

In his blog post, Armstrong admitted that Coinbase “grew too fast” as cryptocurrency trading skyrocketed in early 2021.

“While we did everything we could to get this right, in this case it is now clear to me that we overhired,” he said.

Other market players are also struggling. Celsius Network, a major cryptocurrency lender, said on Monday that it would suspend all withdrawals and transactions due to “extreme market conditions.”

Anna Cooban of CNN Business contributed to this report.

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