Why Blockchain Industry’s Bear Market is Causing Companies Like ConsenSys and ShapeShift to Reduce Teams
In the last seven days, ShapeShift, a leading cryptocurrency company has been forced to let go close to thirty percent of its workforce. This is a move that saw the company lay off a total of thirty-seven employees.
Erik Voorhees, the company CEO and founder, in a letter to platform users and company employees, stated that the latest crypto winter had made it impossible for the firm to continue operating normally. The company had been left with no option but to have to adjust to the worsening conditions in the cryptocurrency market.
In the letter, the CEO stated that the worsening conditions had meant that the company had no option but to lay off a third of its employee base. By letting go of this personnel, the company had in reality laid off thirty-seven workers.
Lessons To Learn From The Crypto Winter
The bull market experienced in early 2017 saw many companies in the cryptocurrency industry start to make changes to their operations. The bull market, which many states were the biggest in history saw many companies, e.g., ShapeShift, Bitmain, and ConenSys start to aggressively expand to other markets, some of which were way out of their normal operating base.
It was during this time that ShapeShift also noted the growth of close to three thousand percent. Many cryptocurrencies already in the market at the time also noted a surge in their valuation which saw it rise past the eight hundred-billion-dollar marks.
At the time, many exchanges had started to record large volumes with many businesses and startups in the crypto universe receiving substantial investments in the form of venture capital. Many pioneer investors also sought to diversify their portfolios by investing in emerging startup ideas.
Voorhees in his letter went on to explain that during the bullish times, the company rides high and fast. And is able to record rates that have never been seen anywhere in the crypto universe before. As such, it only makes sense for the company to also experience a recession when things become dramatic and the markets become severe.
However, as the cryptocurrency markets began to correct the harm done during the winter recession, many digital assets began to experience losses of between seventy and eighty percent of the highs experienced earlier. This also meant that the market would sooner or later start to struggle.
The recession being experienced also contributed to reduced investments, with many investors unwilling to fund startups. This led to a total decline of revenue and an eventual reduction in the number of trades being executed in the crypto markets.
Taking into consideration the fact that many firms had started to expand into other segments of the market, which in some cases led them to invest in other sectors outside finance, it meant that it would not be possible for them to continue operating for much longer. At some point, the companies would have no option but to reduce the number of their teams.