Unfortunately, while Bitcoin has made a swift recovery of the March 12th calculation event, recently rallying to $7,400, the crypto industry has still been strongly affected by the coronavirus outbreak and a broader slowdown in the global economy, new reports indicate.
Crypto Not Unscathed In Coronavirus Outbreak & Economic Fallout
According to a recent report from PricewaterhouseCoopers, a “Big Four” professional services firm, shared by Bloomberg, funding in the crypto space froze in 2019, with M&A sinking 76% to $451 million in 2019 from almost $1.9 billion the year before. Furthermore, funds raised by crypto companies sank 40% in 2019 from the 2018 highs.
This trend has continued into 2020, with the coronavirus outbreak shutting down funding in all industries as capital and credit become scarce.
According to a report shared by Rob “Crypto Bobby” Paone, founder of Proof of Talent, the number of crypto funding deals that took place in Q1 of 2020 was a mere 79, far below the 220 in Q1 of 2019 or 230 in Q1 of 2018.
Paone added that a majority of this decline was in the seed round and Series A funding categories, suggesting few early-stage startups are being seen as good investments by venture capitalists.
The absence of funding, which has only been compounded by the crash in the price of cryptocurrencies from the February peak, has forced companies to lay off staff.
According to a “100% user-generated” list of companies on recruiting/job site Candor, Bitcoin.com, crypto mining firm Bitfarms, and mining hardware manufacturer Bitfury are among the firms in this industry that have begun to lay off staff over the past few weeks.
Outside of this, one of the original crypto companies, Factom, has purportedly gone into liquidation, despite securing millions of dollars worth of funding over the past five years and garnering a grant from the U.S. Energy Department.
It Isn’t All Bad
Although there are crypto companies laying off employees as funding dries up and crypto underperforms, not all hope has been lost.
In a recent podcast published on Monday, Delphi Digital co-founder Kevin Kelly remarked that from what he’s seen, he is relying on the innovation of crypto companies to make their way through their crisis, accentuating this industry’s reputation to adapt at a rapid clip to succeed.
Furthremore, there are companies in the industry that are genuinely outperforming amid these distressing times, namely exchanges, and are leveraging their increased revenues to hire, hire, and hire.
- Binance’s chief executive, Changpeng Zhao, made this clear on March 30th, when he wrote that in the history of his company, they have “never done any layoffs, even through the many ‘[crashes] of Bitcoin’.”
- Also, according to Binance’s careers page, there are 171 open positions, from titles like “Affiliate Marketing Manager” to “Senior Business Manager – Futures International Growth.”
- Kraken, too, seems to be joining in on the hiring spree. According to a report from Forbes published March 26th, the San Francisco-headquartered Bitcoin exchange company is hiring an extra 67 people to its 800-person team, with many of the open positions having a focus on “hospitality professionals and liberal arts majors.”
- Exchanges are benefiting from their unique business model of trading fees, meaning that no matter if Bitcoin is in a bull or bear trend, consistent levels of volume should result in consistent revenues.
And considering that according to CryptoCompare, “Top Tier exchanges” (Binance, Kraken, Coinbase, etc.) saw an 8% increase in volume in March over that of February and Coinbase is seeing high retail demand, it should be no surprise these firms are continuing to hire.