Decentralized pain… Crypto financial services firm Galaxy Digital is reportedly considering cutting one-fifth of its staff as crypto winter's freeze sets in. Galaxy is seen as a bellwether for the industry because its business services bitcoin miners and crypto traders, and it invests in blockchain projects like polygon. Galaxy's not alone in its cuts:
- Bit-axed: This week, crypto exchange BitMex announced layoffs of up to 30%.
- Sadder: Web3 studio Dapper Labs said it's cutting 22% of its 600-person team.
- DCGone: Crypto conglomerate (and CoinDesk parent) DCG laid off 10% of staff.
Misery loves coin-pany… and this party's crowded. It's not just crypto fintechs feeling the squeeze of record inflation and spiking interest rates. Stripe announced yesterday that it'll lay off 14% of its workforce. Layoffs are often forward-looking — a sign that companies expect more slowing growth or falling earnings. This week the cofounder of Tezos, a proof-of-stake blockchain, said crypto winter is "only going to get worse." More cost cuts could be coming.
The future of finance is still tied to the present… Crypto companies want to revolutionize the financial system with decentralized finance (DeFi). In the meantime, those companies are still accountable to investors, boardrooms, and centralized finance (CeFi) realities. Since crypto is still viewed by many primarily as an investment opportunity (not a transactional currency), the industry has to deal with today's rising interest-rate reality that’s dampened demand.