The Situation Is As Bitcoin Sinks, The Industry Startups Are Forced To Cut Back
Learn why startups are cutting back. Is it only because Bitcoin is sinking?
How has Bitcoin performed in the market?
Earlier, the price of Bitcoin has hit an all-time high of nearly $20,000 as the cryptocurrency enthusiasts everywhere boasted about the wealth it would bring later on as initial coin offerings exploded and startups continued to pull in record amounts of venture capital as fast forward one year, the Bitcoin is down 75 percent to a meager $ 3,700 as it sinks quickly as its meteoric rise and industry startups paying the price.
Thereby the latest victim is Bitmain a provider of Bitcoin mining hardware that has very recently submitted its IPO prospectus to the Stock Exchange of Hong Kong and the company confirmed to Coinbesk that cutbacks would begin imminently and according to a spokesperson, there had been some adjustment to the staff as they continue building a long-term sustainable and scalable business as also a part of that is having to focus on things that are core to that mission and not auxiliary.
Thereafter it was Beijing based Bitmain hasn’t clarified just how many of its employees are to be impacted as through rumors which Bitmain has since denied, on Maimai, a Chines LinkedIn like platform suggesting as many as 50 percents of the company’s headcount could be laid off. It is here that news comes after the crypto mining giant confirmed it had shuttered its Israeli development center, Bitmaintech Israel laying off 23 employees’ in the process. Whereas it is now that Bitmain employs at least 2,000 people up from 250 according to PitchBook as the company’s growth has skyrocketed.
According to Bitmaintech Israel head Gadi Glikberg the crypto market has undergone a shakeup in the past few months forcing Bitmain to examine its various activities around the globe and to refocus its business following the current situation. As of now, Bitmain has raised more than $ 800 million in venture capital funding from Sequoia, Coatue Management, Softbank and more with a valuation of $ 12 billion as it quickly soared to become the most valuable crypto startup in the world, surpassing Coinbase that had garnered an $8 billion valuation.
Meanwhile, in its IPO filing, Bitmain has reported more than $ 2.5 billion in revenue up nearly 10x on the $ 278 million it claimed for as the Bitmain said it surpassed $ 2.8 billion in revenue. These come as astonishing numbers as to whether Bitmain can sustain this kind of momentum has been called into question especially as it gears up to go public as to what is considered to be the largest IPO that is crypto-related to date. Thereby the crypto market by nature is unpredictable as a characteristic that’s less than favorable to public market investors.
Startups Sacrifice Staff
It was then that subsequently, the Huobi group comes as a crypto trading platform also headquartered in Beijing is laying off a portion of its 1000 employees according to a report from the South China Morning Post. It is thereby backed by Sequoia and the ZhenFund as it didn’t immediately respond to a request for comment. There is also this Brooklyn based ConsenSys which earlier confirmed it was laying off 13 percent of its 1200 person staff as the company came active in the crypto ecosystem, incubating and investing in decentralized applications built on the Ethereum blockchain.
As the ConsenSys founder and crypto billionaire Joseph Lubin wrote in a letter to employees regarding the layoffs, they are excited about ConsenSys 2.0 as the first step in the direction that has been a difficult one, as they streamline several parts of the business including ConsenSys Solutions, spokes and hub services leading to a reduction of 13 % of mesh members. It was finally Steemit a distributed app designed to reward content creators’ that laid off 70 percent of its staff citing poor market conditions.
Hereafter the founder and chief executive officer Ned Scott wrote in a statement that they believe that Steem can be by far the best and lowest cost blockchain protocol for those applications and that the improvements where then will result from this new direction thereby making it far better for application sustainability and however to ensure that they can continue to improve Steem they need to first get costs under control to remain economically sustainable. He continues that there’s nothing that he wants more now than to survive to keep steemit.com operating and keep the mission alive to make great communities.
The Concluding Words
It is then that downsizing the following periods of rapid growth that there are many crypto startups experienced during the Bitcoin boom as it is only natural and can these new businesses help continue to endure periods of extreme volatility without even crashing completely? There is one thing that is certain that if the price of Bitcoin sinks further and further the staff adjustments at crypto startups large and small will be unavoidable.