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Coinbase’s horizon remains uncertain.
Cryptocurrency exchanges can’t get out of the bad patch the cryptocurrency sector has been through for a year.
The cryptocurrency market has lost around $2.1 trillion compared to the all-time high of $3 trillion reached in November 2021. The market is currently worth about $886 billion, according to data firm CoinGecko.
Bitcoin, the most popular digital asset, has lost 75% of its value compared to the all-time high of $69,044.77 reached on November 10, 2021. BTC price is currently trading around $17,233.76. The price of the cryptocurrency king remains relatively stable after 2023.
The biggest problem with the young blockchain-powered financial services industry is mistrust. Since the virtual currency boom in 2021, public distrust has arisen due to a series of scandals.
‘Difficult decision’
Last May, sister tokens Luna and UST collapsed overnight, costing retail and institutional investors billions of dollars. The disaster sparked a credit crisis that forced hedge fund Three Arrows Capital (3AC) into liquidation. Impending cryptocurrency lenders such as Voyager Digital and Celsius Network have filed for Chapter 11 bankruptcy.
This domino game revealed the interdependence between incestuous relationships and actors in the cryptospace. Customers of these platforms who lost their savings were often unaware that their money was being loaned to other businesses.
In November, Sam Bankman-Fried’s crypto empire collapsed. The tragedy was truly devastating as the former trader was the face of the cryptocurrency institution. He rescued many companies during the credit crisis and his FTX cryptocurrency exchange was valued at his $32 billion last February.
The FTX rout has yet to reveal all of its casualties. But the biggest problem is trust in a completely collapsed cryptocurrency industry. Retail investors are fleeing the sector, and institutional investors are becoming more cautious, especially given the expected recession this year.
This is confirmed by Coinbase. The platform has announced that nearly 1,000 more jobs will be lost.coin base (coin) – Get Free Report Cut 20% of the current workforce, or about 950 jobs.
CEO Brian Armstrong told employees in a Jan. 10 blog post, “We need to ensure adequate operational efficiencies to weather the crypto market downturn and seize any opportunities that may arise. there is,” he said. Decided to cut operating expenses by about 25% in Q/Q, including laying off about 950 people. ”
‘pain’
“This is the first time we have seen a crypto cycle coincide with a broader recession,” Armstrong continued. “When we looked at the 2023 scenarios, it became clear that we needed to cut costs to increase our chances of success in all scenarios. There was no way to cut it, enough without even considering a change in personnel.”
Coinbase will therefore close some projects.
All of these actions will result in costs of $149 billion to $163 billion, the company said in its regulatory filings. These charges, primarily severance and other termination benefits, will be included in the first quarter 2023 results.
The crypto firm also said it expects its full-year adjusted EBITDA loss to stay within the $500 million “guardrail” set last year.
The new job cuts are Coinbase’s second wave of job cuts in less than a year. Last June, the company cut his employment by 18% and laid off 1,000 people.
These job cuts mark the end of an era of affluence and haughty growth in the crypto industry that has benefited Coinbase. The platform will have his IPO in April 2021, and the stock price has skyrocketed to $341.
However, last year it dropped sharply. The stock is currently around $38, which represents an 89% drop for him.
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