Digital assets have already been facing one of the worst crises in the industry for a year now, but judging by recent layoff announcements, crypto executives seem to be bracing for more turmoil.
the bags of cryptocurrencies Bybit and Swyftx in the past two days have said they will lay off 30% and 35% of their employees, respectively.
The announcements come less than a week after bigger rival Kraken revealed similar cuts.
With the reverberations of the implosion of FTX in Sam Bankman-Fried, Bybit CEO Ben Zhou and his Swyftx colleague Alex Harper gave candid assessments of the challenges facing the industry.
In a message to employees seen by Bloomberg News, Harper cited the potential for more unpredictable events, and said trading volumes could see “a potentially sharp decline” in the first half of 2023. Zhou signaled the possibility that “we are entering an even colder winter than we expected, both from an industry and market perspective”.
Exchanges are at the epicenter of the sector’s crisis as trading volumes have dropped sharply after a $2 trillion drop in the market value of digital assets put traders off retail🇧🇷
In addition, doubts about whether FTX had inappropriately used client funds to support Alameda Research, Bankman-Fried’s brokerage, led to a loss of faith in centralized markets.
After a year of hacks, meltdowns and bankruptcies, pessimism now grips the industry. A drop of approximately 70% in the price of Bitcoin to $5,000 next year is among “surprise” scenarios that markets may be “downplaying,” Standard Chartered’s global head of research Eric Robertsen said in a note. That would leave the digital currency about 90% below its peak of nearly $69,000 in November 2021.
For all the concern among digital asset executives, perhaps the darkest prediction for the industry comes from one of the biggest names in traditional finance.
The CEO of BlackRock, Larry Finka longtime cryptocurrency skeptic, said last week that he expects most crypto companies will not survive the chaos unleashed by the FTX crash.
Source: Moneytimes
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