The Bitcoin crash not only affected the financial markets and investors, but it already has its first victims in the workplace, because major exchange platforms announced layoffs in their staff.
The most used cryptocurrency in the world plummeted 5.42% in the last 24 hours and 25.05% in the last weekreaching a value of USD 22,205.89 the unita minimum not seen since December 2020. The price even broke through USD 22,000 during this morning.
Experts noted how main cause of the bitcoin crash to the imminent announcement of rate hikes by the US Federal Reserve (FED), which will be revealed this Wednesday and whose increase could reach up to 75 percentage pointsaccording to market estimates.
Since November 2021 when it peaked at $67,617, bitcoin lost more than a third of its value with a 65% decline While the capitalization of The entire cryptocurrency market fell from $3 trillion to $940 million.
Crypto companies announced layoffs: what are they
Faced with the collapse of the cryptocurrency market, some of the representative companies in the sector began in recent days to announce cuts and layoffs.
BlockFia cryptocurrency lender whose headcount grew from 150 employees at the end of 2020 to more than 850, laid off 20% of its staffas reported by the Bloomberg agency, because of what its CEO, Zack Princeconsidered as a “dramatic change in macroeconomic conditions”.
In the same way, Crypto.coma Singapore firm that with the market boom became the sponsor of the next World Cup in Qatar and of the Formula 1and make commercials with the actor Matt Damon and the basketball player LeBron Jamesreported yesterday dismissal of 260 workers, which represents the 5% of your staff.
The cuts also reached Geminiwith a 10% layoffand to the platform coinbasewho after announcing the freezing of their contracts on June 2, fired 18% of its staff this Wednesdaywhich totals 5,000 employees.
Likewise, goodbitone of the main platforms in Argentina, laid off 45% of its staff at the end of May, reducing its workers from 180 to 100.
Fall of Bitcoin and rise in rates: a close relationship
The collapse of cryptocurrencies can be explained by a strategy linked to the rate hike of the governing body Jerome Powell which comes from increasing its reference interest rate by 0.25% in March and 0.50% last month placing it in a range of 0.75% to 1%.
In this context, upward corrections have an impact on higher risk assets such as shares -especially technology ones- and own cryptocurrencies as debt bonds become more attractive.
To this was added yesterday the “playpen” arranged by cryptocurrency lender Celsius, which stopped the withdrawals and transfers of its clients. The measure sharpened fears of a lack of solvency of the firm, and generated a contagion effect to the rest of the market.
In the same way, Binancethe largest exchange platform, also stopped his withdrawals yesterday although it only did it for a few hours, as it was assigned to a technical problem caused by “a stuck transaction that caused delays”.