Fresh layoffs show a ‘spring’ isn’t near for the crypto industry. But when it comes to the groundwork needed for a better market time the time is now.
Image source: Pexels/Anna Tarazevich
It is hard not to find someone in your family, company or wider network who has lost money – probably that they could not afford to lose – from dabbling in the crypto markets of recent years.
Undoubtedly others might have made money. Or at least invested with their eyes fully open.
But, there is no doubt hundreds of thousands, perhaps millions have been hurt by a bull a FOMO-driven foray into crypto markets with many still unsure about how much of their stakes they will get back, if at all.
Anyone starting 2023 making a fresh investment into Bitcoin, though, is seeing a very bullish 40 per cent uplift in the first month of the year.
Does this show the prospect of a return to crypto-mania could be on the cards? Let’s hope not and by judging recent goings on in the industry, firms are still preparing for a tougher trading environment.
Last week bought sad news in the crypto world with UK-based Luno announcing it was laying off 35 per cent of its staff.
“2022 has been an incredibly tough year for the broader tech industry and in particular the crypto market. Luno unfortunately hasn’t been immune to this turbulence, which has affected our overall growth and revenue numbers,” said Marcus Swanepoel, CEO and co-founder of Luno.
“This decision will affect some of the smartest, kindest and most hard-working people I’ve ever known, who have gone above and beyond to help build our industry, company and amazing culture. As you can imagine it is totally heartbreaking to part with so many incredible people that have contributed so much, and our priority is to handle these departures with the empathy, generosity and gratitude that these Lunauts deserve,” he added
Luno is heavily geared to the retail adoption of crypto as well as having substantial marketing costs in its bid to win business in the form of high-profile music event sponsorship.
The company says it is having to “readjust” its focus to maintain a “leadership position” in its core markets ahead of what it will believe is a temporary and cyclical issue.
The bearish assessment from Luno underscores a prolonged period of uncertainty for crypto.
Not only has this pain for the crypto industry been driven by a severe global economic downturn that has hit investor sentiment toward tech businesses more than anywhere else in the market. Also, there has been a never-ending operatic flow of scandal, ruin and destruction of which FTX’s collapse is the best but far from the only example.
Luna, Three Arrows and Genisis show the contagion that sets in during financial crises as well as underlying ‘issues’ that existed all along and only become apparent when the financial tide goes out.
Genesis’ woes have left many users of the likes of Gemini locked out of withdrawing from their wallets and the company also shed c.30 per cent of its staff via a mass layoff in January.
Swanepoel notes that these scandals are having “an overall compounding effect” on the crypto industry.
Whether or not this crypto rebound demonstrates a sustainable rally or a ‘dead cat bounce’, is irrelevant.
Now is the time for regulators, investors and the crypto industry itself to improve and time is of the essence.
Sign up for our newsletters
