- Coinbase and BlockFi are among the many crypto firms that are scaling down operations by firing employees.
- Differently, Binance, FTX, and Polygon are hiring, supporting the narrative that bearish times are the best to build long-term investments.
Binance is one of the few firms that are on a hiring spree, even with the ongoing crypto market crash. Meanwhile, many others including giant crypto lender BlockFi, and Coinbase exchange, have been forced to scale down.
Several macro-economical, geopolitical, and crypto happenings have catalyzed the so-called ‘crypto winter’ of 2022. Rising inflation, hikes in interest rates, and the Russia-Ukraine conflict are on the list. Wall Street has been affected as well, and many investors now fear an impending recession.
Contributing factors from the crypto market have been the Terra (LUNA) debacle, and more recently, the Celsius scandal. The BlockFi rival announced on Sunday that it had frozen all withdrawals due to a liquidity shortage. The indefinite pause drew attention to its allegedly unsustainable yield earning system.
Bitcoin (BTC) fell to lows last seen in December 2020, trading at $20,779 as of writing time. Altcoins have also mirrored BTC’s fall. At reporting time, Ethereum (ETH) and Binance Coin (BNB) were down 11.7 and 9.6 percent in the last 24h.
Crypto firms increasing layoffs, while others hire
As a result, many crypto firms have been forced to seek drastic measures to cut their losses. Coinbase has laid off 18 percent (over 1,000 people) of its workforce, Gemini 10 percent, and Crypto.com 5 percent.
Yesterday, BlockFi cut roughly 20 percent of jobs. Other crypto firms that have made similar moves are the Latin American exchanges Bitso and Mercado Bitcoin. Meanwhile, crypto-miners have been selling off their mined stash or getting in on alternative revenue sources.
Binance, the largest exchange by daily traded volume, has taken a different approach. The company had announced it now has 2,000 open positions in the fields of engineering, product, marketing, and business development.
“Crisis is the best time to build”
Its CEO, Changpeng Zhao (CZ), said Binance is looking to “leverage” the crypto crisis “to the max.” Its co-founder Yi He affirmed the same, adding:
The crypto space is still in its early stages; a great time to bring on top talent.
The Sam Bankman Fried (SBF)-led exchange FTX is also adding to its team, SBF explained in a recent Twitter thread. He said the company “hired carefully” and “scaled our revenue and productivity, not our expenses.” Scaling back was not an option since each member of the team has a “huge responsibility.”
13) A lot of reporters have reached out asking if we're going to be scaling back.
And our answer is the same as always:
We're going to keep pushing forward.
— SBF (@SBF_FTX) June 6, 2022
Likewise, Ryan Wyatt – CEO, of Polygon Studios said his company plans on increasing its personnel by 15 percent this year.
In an interview with the Economic Times, Nikhil Chandak of JM Financial said,
[…] for a longer-term patient investor, history has shown time and again that a crisis is the best time to build holdings in quality companies and attractive valuations.