Crypto terminations at Bitmex, Galaxy and DCG and what they mean
When the crypto markets melted down this spring after the collapse of the Terra stablecoin, layoffs followed soon after as token companies like Coinbase and OpenSea cut their workforces by 20% or more. By autumn, the worst felt over, but in recent weeks the bloodletting has started again.
On Tuesday, long-running derivatives exchange BitMex cut 30% of its staff, while news emerged that Galaxy is exploring 20% cuts and that conglomerate DCG will shrink by 10%. This comes two weeks after it emerged that cuts at Crypto.com — which produced the infamous Matt Damon Super Bowl ad — were deeper than the company had allowed — 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 who lose their jobs are not the rich and obnoxious brothers who give the sector a bad name, but instead ordinary people who worked in sales, marketing and customer support. Being laid off can be not only a financial blow, but a crushing personal experience, especially at a time when the economy is teetering on the edge of recession.
But for the broader crypto industry, it’s hard not to believe that something good will come from these layoffs. That’s because too many companies got fat from the sugar highs of the 2021 bull run, spending recklessly while failing to improve their products and customer experiences. Instead of making crypto more accessible to regular 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 by renaming the Staples Center in Los Angeles.
Meanwhile, some of the layoffs underscore how one-time industry pioneers are becoming irrelevant as they are overshadowed by newer titans like FTX and Binance. As for Bitmex, the exchange was once the largest player in the derivatives market, but now only has a 2% market share. It’s hard to see how the company will regain 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 the crypto winter are cruel but necessary, showing how the crypto industry is subject to the same creative forces of destruction as everywhere else.
(Special note: I want to host one Twitter Spaces from the @fortunemagazine account at noon ET today to discuss Elon Musk with a former Twitter executive who is now the CMO of Haun Ventures. Come by!)
Jeff John Roberts
[email protected]
@jeffjohnroberts
DECENTRALIZED NEWS
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)
ONE Charles Schwab survey of 401,000 accounts found that nearly half of Gen-Z and millennial employees want the option to invest part of their retirement savings in crypto. (CNBC)
Dozens of new dog-related cryptocurrencies emerged after Elon Musk tweeted one Shiba Inu picture on Halloween; almost all of them lost 90% of their value in one day. (Codex)
Digital currency group promoted COO and longtime executive Mark Murphy to president as part of the restructuring effort. (The block)
MoMA will host a display by an artist selling their work as NFTs while Guggenheim is hiring a new curator of digital art—part of a trend in which museums are leaning into digital and crypto art. (New York Times)
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