Friday, June 9, 2023

BlockFi Reduces Workforce as Crypto Layoffs Escalate


BlockFi, a crypto financing startup, reveals today that they are laying off workers. This becomes the latest firm in the digital asset field to do so in the midst of a devastating bear market.

BlockFi, like US crypto exchange Gemini, Coinbase, and, states in a Monday post that they are also decreasing their employment. This is by approximately 20%. A couple of marketplaces in Latin America also confirm layoffs.

Since the first quarter of 2022, the macroeconomic situation transforms substantially. This causes a significant pullback in equities and cryptocurrency markets. As a result, their top priority is to generate revenue. The reason is for the creators to control their trajectory as they navigate what many predict will be a lengthy global slump.

BlockFi provides its users with high-yielding crypto accounts. The company says that they experience a significant impact from the substantial shift in macroeconomic conditions globally. They are most likely referring to worries of a probable recession weighing heavily on markets all around the world.

Recently, Wall Street’s S&P 500 drops 20% less than its January 3 high. Crypto is not immune and is treading in the footsteps of traditional markets, with Bitcoin and almost the whole digital asset ecosystem struggling. Celsius, one of BlockFi’s main crypto-lending competitors, states Monday that it will suspend withdrawals from its website. Accordingly, this is due to market circumstances. After the disclosure, the firm’s token, CEL, plummets by 70%.

This Year’s Crypto’s Rocky Beginning

Recently, BlockFi CEO Zac Prince rushes to Twitter to reassure his own users. According to his tweet, all goods and services will remain to work in part ordinarily. As a result, the firm issues its own set of terrible news today. However, they are decreasing their personnel by around 20%, which will affect every team within the organization.

This choice is because of the market conditions that have a detrimental influence on the overall growth pace. It also includes a thorough examination of our strategic goals. The creators are doing all in their ability to show empathy and compassion to all of their unfortunate coworkers.

Crypto had a bumpy start to the year, but things aren’t looking good right now. Bitcoin, the most valuable cryptocurrency by market capitalization, is down about 15% in the last 24 hours. Thus, it is selling at $23,734.62 per coin.

The rest of the market is taking a beating as well. The total market capitalization of all cryptos is presently less than $1 trillion, standing at $980.65 billion. This is the first time that it happens since February 2021. Enthusiasm for cryptocurrencies starts to fade. As a result, investors sell hazardous assets like Bitcoin and stocks. Moreover, organizations in the field recently are cutting off employees.

Given the attention it has from authorities, BlockFi may be in an extremely precarious position. The bank commits earlier this year to pay a $100 million agreement to the SEC and 32 states. This is after failing to adequately register its high-yield Blockfi Interest Funds. BlockFi provides enormous interest rates on crypto deposits. However, deposits are not protected, posing a risk to its consumers.

Jacob Yang
Jacob Yang
Jacob Yang works at Cryptoconstellation as a writer. He has been working in finance for the past 6 years. Jacob loves sharing news about the cryptocurrency world and he, himself has invested in a few. Jacob enjoys travelling and finding the best restaurants wherever he goes.

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