(Bloomberg) — The crypto industry — white-hot last year as Bitcoin soared to a record and enthusiasm for everything from Bored Ape NFTs to DeFi and “play-to-earn” games propelled the entire market past $3 trillion — is feeling a chill.
Gemini Trust Co., the crypto business run by billionaire twins Cameron and Tyler Winklevoss, on Thursday told staff of plans to slash the company’s workforce by 10% as trading across the industry slumps. Rain Financial Inc. — one of the Middle East’s largest crypto exchanges, with big backers from Silicon Valley — also made cuts, laying off dozens of employees, according to people with direct knowledge of the matter. Meanwhile, crypto exchange Coinbase Global Inc., its shares in a funk as transaction volumes decline, said last month it will slow its pace of hiring.
“This is where we are now, in the contraction phase that is settling into a period of stasis — what our industry refers to as ‘crypto winter,’” the Winklevoss brothers wrote in a memo sent to Gemmini employees that was viewed by Bloomberg News. “This has all been further compounded by the current macroeconomic and geopolitical turmoil. We are not alone.”
Cryptocurrency prices have declined this year from the highs reached in early November and have largely remained in the doldrums, with the market now less than half the size it was at its 2021 peak. It’s only recently, though, that digital-asset executives have begun to characterize the situation as a cyclical “crypto winter,” when token prices may stay depressed for months. During the crypto winter of 2018, layoffs permeated the industry.
Venture capitalists are still pumping money into crypto startups, with Andreessen Horowitz breaking records last week by raising a $4.5 billion fund dedicated to crypto, and Binance’s venture-capital arm raising a $500 million crypto fund. But signs of cracks have begun to appear in recent weeks — particularly at exchanges, which typically see trading volume plunge during bear markets, when retail investors retreat. Gemini is refocusing “only on products that are critical to our mission,” according to the memo, with team leaders asked to assess their headcount based on “turbulent market conditions that are likely to persist for some time.”
The Winklevoss twins were among crypto’s early big-name believers and adopters. They started Gemini in 2014, and over time added a variety of services. As a privately held company, Gemini doesn’t disclose its number of employees. LinkedIn lists about 1,000 people who may work there.
Late last year, Gemini said it raised $400 million in a round of funding that valued the company at $7.1 billion.
Gemini’s offices will stay closed Thursday. Impacted employees will receive a calendar invite for remotely held conversations on the separation packages and health-care benefits Gemini will be providing. On Friday, the company will hold a company-wide “standup” to talk about its future.
“Today is a tough day, but one that will make Gemini better over the long run,” the memo said.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
