Crypto Winter Thaw? Layoff Wave Subsides as Bitcoin Surges and Hiring Picks Up

The cryptocurrency industry has been on a wild rollercoaster ride in recent years. Following a record-breaking 2021, the year 2022 saw a major downturn, leading to a brutal wave of layoffs across the entire crypto sector. However, with a recent upswing in Bitcoin prices and some positive regulatory developments, some companies are cautiously dipping their toes back into the hiring pool.

Bloodbath in Cryptoland- 2022 and Early 2023

Several factors created a perfect storm for crypto companies in 2022 and 2023 that resulted in mass layoffs:

The Great Crypto Bear Market

The overall crypto market plunged, with Bitcoin prices plummeting 75%. This dramatic price drop forced many companies to tighten their belts and slash costs to stay afloat.

Regulatory Scrutiny Intensifies

Increased scrutiny from regulators around the world added uncertainty to the industry. With stricter regulations looming, companies struggled to navigate the evolving landscape, impacting their business outlook.

Domino Effect of Bankruptcies

High-profile bankruptcies like FTX, a major crypto exchange, further eroded investor confidence and sent shockwaves through the entire industry. This domino effect had a ripple impact, impacting other crypto companies financially and forcing them to re-evaluate their staffing needs.

The table below shows some of the major crypto companies that were forced to lay off a significant portion of their workforce during this period. It also shows the estimated percentage of staff reduction each company faced:

It is pertinent to mention that some companies, like Crypto.com, reportedly laid off even more employees than they initially announced.

Signs of Recovery and Renewed Hiring

Despite the significant layoffs in the past, there are some tentative signs that the crypto industry might be on the road to recovery:

• Bitcoin Climbs to New Highs—The price of Bitcoin, the leading cryptocurrency, has surged significantly in 2024, reaching new highs. This price increase injects optimism into the industry and suggests a potential return of investor confidence.
• Spot Bitcoin ETFs- The long-awaited approval of spot Bitcoin exchange-traded funds (ETFs) in the US is seen as a major step forward for the industry. These ETFs provide a regulated way for investors to gain exposure to Bitcoin, potentially attracting new investment and fostering greater trust.
• Hiring Revival- A Cautious Approach: Some companies, like Crypto.com, are strategically adding staff again. However, this hiring is likely calculated and focused on specific areas to support potential growth opportunities.

Data from Layoffs.fyi shows a significant decrease in tech industry layoffs in 2024 compared to 2023, suggesting a wider economic improvement that could also benefit the crypto sector. Major crypto exchanges like Coinbase, Binance, and Gemini currently have open positions listed on their websites, indicating a guarded return to hiring.

However, the crypto industry still faces challenges. Regulatory concerns and ongoing lawsuits in the US continue to cast a shadow on the industry’s future.

The crypto industry has been through a period of turbulence with significant layoffs. While recent developments and a possible market recovery offer some hope, the future remains uncertain. Navigating the regulatory landscape, building trust with investors, and adapting to changing market conditions will be vital for the long-term success of crypto companies. 

https://cointelegraph.com/news/coinbase-to-cut-another-20-of-its-workforce-in-the-second-wave-of-layoffs

https://milkroad.com/jobs/layoffs/

https://cointelegraph.com/news/reversing-staff-layoffs-crypto-exchanges-hiring