As the digital currency market continues to tank, cryptocurrency exchange Coinbase is cutting off 18 percent of its workforce.
In an open letter published Tuesday, CEO Brian Armstrong said the “tough choice” to let off around 1,000 workers was made to ensure “we stay healthy throughout this economic slump.” According to the exchange’s website, it employs around 4,900 people.
Armstrong forewarned of an impending economic collapse that might prolong crypto’s current bad market.
Although future economic conditions are difficult to forecast, Armstrong stated the corporation prepared “for the worse so we can manage the business in any scenario.”
Coinbase’s value has plummeted as investors continue to dump crypto, fleeing riskier assets in anticipation of significant interest rate hikes to combat inflation.
In November 2021, Bitcoin reached an all-time high of $69,000. The world’s most expensive cryptocurrency has lost two-thirds of its value since then, falling below $23,000 on Tuesday. Since Friday, it has lost approximately a quarter of its worth.
Meanwhile, Coinbase’s stock has fallen by approximately 80% this year and by 85% since its initial public offering in April 2021. The corporation, which once had a market capitalization of about $100 billion, now has a market capitalization of less than $12 billion.
Armstrong stated in his blog post that Coinbase “expanded too quickly” as crypto trading exploded in early 2021.
Other market participants are also having difficulties. Because of “extreme market conditions,” the Celsius Network, a major cryptocurrency lender, stated Monday that it was suspending all withdrawals and transactions.
