OpenSea, a nonfungible token (NFT) marketplace, joined other cryptocurrency businesses in making huge layoffs on Thursday amid one of the most turbulent times in the history of the sector.
What’s a crypto winter?
A market for cryptocurrencies that are not functioning well is referred to as “crypto winter” in popular parlance. Similar to a bear market on the stock market, this phrase. A “crypto winter” is characterized by unfavourable sentiment and declining average asset values across a wide range of digital currencies.
According to research, the investor mindset is significantly impacted by crypto winters. When examining the price history of cryptocurrencies, it can be simple to identify a crypto winter since the slump may be accompanied by a double-digit percentage decline in cryptocurrency prices.
Devin Finzer, co-founder and CEO, announced the firm was letting go of up to 20% of its workforce on Twitter on Thursday afternoon. Finzer attributed the layoffs to “an unprecedented mix of crypto winter and wider macroeconomic volatility” in a lengthy memo distributed to workers.
The changes we’re making today position us to maintain multiple years of runway under various crypto winter scenarios (5 years at the current volume) and give us high confidence that we will only have to go through this process once, he continued. “[W]e need to prepare the company for the possibility of a prolonged downturn,” he said.
The layoffs highlight the catastrophic status of the cryptocurrency industry, which has seen a value loss of more than two-thirds from its peak during the past year. The sharp conclusion that no firm is exempt from the downdraft of the so-called crypto winter is provided by the news that OpenSea, the largest NFT market in the world by volume, was slashing employment.
In recent months, mass layoffs at cryptocurrency businesses have become the norm, with organizations like Gemini, Crypto.com, BlockFi, and Coinbase eliminating hundreds of workers. One estimate is that crypto firms cut 1,700 payrolls in only June.
Having said that, not every business in the sector is laying off employees. Exchange behemoths Binance, Kraken, and FTX, have all confirmed that they will hire additional people soon.