How Crypto Crash Brought Bad Karma to a New York Yoga Studio
New Vibe Yoga in New York’s East Village is a nearly perfect yoga studio. The smell of peppermint and eucalyptus bathes the training room on the top floor, with its exposed brick walls and crackling wood fire, in a warm and calm haze. But although the owner, Alex Schatzberg, has created a relaxing haven for his clientele, he himself struggles with financial anxiety.
The number of mats hitting the wooden floors is barely enough to keep Schatzberg’s business afloat. And in the past year, the lower Manhattan studio has suffered a financial blow from an unlikely source: the crypto crash.
“Crypto was like my life raft . showed how far the unlikely ripples of the crash in digital tokens have spread.
The first victims of the meltdown of the crypto industry were millions of investors who plowed their money into digital assets, as well as the former crypto titans themselves, whose fortunes were wiped out overnight. But an eclectic array of businesses that thrived during crypto’s rise — from nightclubs in Miami to luxury hotels in the Bahamas — are also suffering from the contraction.
Schatzberg’s yoga studio, which opened in its current location in 2017, is just one part of his business that occupies three floors of a townhouse on St Marks Place – described by author Ada Calhoun as “the hippest street in America”. He also rents out bedrooms on Airbnb and offers larger rooms for booking events. While yogis were slow to return to in-person classes after the pandemic, Airbnb became the mainstay of Schatzberg’s revenue, thanks to the popularity of his place with a new group of cash-rich travelers.
Cryptocurrency values increased tenfold from the beginning of Covid to the peak in November 2021, giving many traders a temporary flight of riches. Most of Schatzberg’s orders were from those in the crypto industry. “I was priced very high,” he said. – They were the ones who had the money.
The New-Age atmosphere and the possibility of some quick stretches between trades appealed to this clientele, and demand grew among crypto devotees visiting the city for work or digital asset conferences – which were held in person even during the pandemic. Mostly young and nouveau riche, they practiced yoga and then spent their days in their downstairs rooms making deals or watching YouTube videos about token trading, Schatzberg recalls.
But the boom didn’t last long. Starting last May, the crypto sector suffered a series of explosions, and much of its apparent wealth evaporated as quickly as it had appeared. The total value of digital currencies has fallen by around two-thirds from its peak.
Financial analysts blame the fall in crypto on the same fundamental shift in the global economic order that has hit other relatively speculative corners of the financial markets, such as big tech. To combat ongoing inflation, central banks have sharply reversed a decade of easy monetary policy, making the cost of borrowing the most expensive in more than a decade. Many companies feel in a pinch.
As the flow of easy money has retreated and bookings have dried up, Schatzberg has fallen back on the yoga business — but with fewer office workers now making the trip to Manhattan, attendance remains at just a quarter of its pre-pandemic level. Like other service and hospitality businesses in New York that thrived on office workers, Schatzberg is facing a slow and partial recovery from Covid along with rising costs and the curveball of the crypto collapse.
But with devotional chants and Indian flute music blaring from the studio speakers, Schatzberg insists he will find a way to survive the financial pressures and return to profitability. For that he depends on a currency that is far more tangible than those traded by his former customers. “New York runs on the dollar,” he says. “If you don’t bother, then get out.”
