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Crypto layoffs at Bitmex, Galaxy and DCG and what they mean

When the crypto markets melted down this spring following the collapse of the Terra stablecoin, layoffs soon followed as marquee companies like Coinbase and OpenSea cut their workforces by 20% or more. By autumn it felt like the worst was over, but in recent weeks the bleeding started anew.

On Tuesday, longtime derivatives exchange BitMex cut 30% of its staff, while news emerged that Galaxy is exploring 20% ​​cuts and that conglomerate DCG will shrink by 10%. It comes two weeks after it was revealed that layoffs at Crypto.com — which produced the infamous Matt Damon Super Bowl ad — were deeper than the company had admitted — about 2,000 people, 30% to 40% of his workforce, was laid off.

This is nothing to cheer about, even for those who despise the crypto sector. Most of those losing their jobs are not the rich and unpleasant bros who give the sector a bad name, but rather everyday people who worked in sales, marketing and customer service. Being laid off can be not only a financial blow, but a crushing personal experience, especially at a time when the economy is teetering on recession.

But for the broader crypto industry, it’s hard not to think that something good will come from these layoffs. That’s because too many companies got fat from the sugar highs of the 2021 bull run, spending recklessly while not improving their products and customer experiences. Instead of making crypto more accessible to ordinary consumers, they blew millions on TV ads and naming sports stadiums. One wonders how the Crypto.com CEO feels right now about his decision to drop $700 million on renaming the Staples Center in Los Angeles.

Meanwhile, some of the layoffs highlight how one-time industry pioneers are becoming irrelevant as they are eclipsed by newer titans like FTX and Binance. In the case of Bitmex, the exchange was once the largest player in the derivatives market, but now only has a 2% market share. It’s hard to see how the company regains that lost ground, or how other faded stars from crypto’s early days like Blockchain.com or Gemini can make a comeback. Ultimately, the lessons of crypto winter are cruel but necessary, showing how the crypto industry is subject to the same forces of creative destruction as everywhere else.

(Special note: I will be hosting Twitter Spaces from the @fortunemagazine account today at 12pm ET to discuss Elon Musk with a former Twitter executive who is now CEO of Haun Ventures. Come take a look!)

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

DECENTRALIZED NEWS

A Harris poll commissioned by Grayscale on popular attitudes toward crypto found that 33% of adults under 44 think crypto is a good place to put money, while only 13% of older people did. (Forbes)

A Charles Schwab survey on 401k accounts found that nearly half of Gen-Z and millennial employees want the option to invest a portion of their retirement savings in crypto. (CNBC)

Dozens of new dog-related cryptocurrencies have since appeared Elon Musk tweeted a Shiba Inu photo on Halloween; almost everyone lost 90% of their value in a day. (codesk)

Digital Currency Group has promoted COO and longtime CEO Mark Murphy to president as part of its restructuring efforts. (The Block)

MoMA will present an exhibition by an artist who sells his work as NFTs while the Guggenheim is hiring a new curator of digital art—part of a trend where museums are leaning toward digital and crypto art. (New York Times)

MEME OF THE MOMENT

In the old days:YH5BAEAAAAALAAAAAABAAEAAAIBRAA7

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