Unsurprisingly, the so-called “cryptocurrency winter”, that is, the prolonged period of current low prices, has impacted companies in the sector.
There were several companies making mass layoffs, facing financial difficulties and needing to be “rescued” to avoid a collapse.
Furthermore, in this bearish scenario, many cryptocurrency exchanges have closed their doors. More precisely, a survey showed that, in the period of 30 days, 25 crypto trading platforms closed their operations.
Exchanges close their doors
To arrive at these numbers, Finbold analyzed data from CoinMarketCap. With that, it noted that on July 6, the number of cryptocurrency exchanges globally was 500. This number was already a drop from the highs recorded in previous months, according to the company.
Then, using a web file tool, Finbold determined that the industry lost 25 exchanges in 30 days, whereas on June 6, the number was 525, according to CoinMarketCap data.
According to Finbold, the demise of these 25 cryptocurrency exchanges is partially linked to the drop in the overall crypto asset market value.
In addition, they claim that exchanges have been impacted by other macroeconomic conditions in addition to the drop in the price of digital assets. This includes, for example, rising interest rates and inflation.
As Finbold analysts have highlighted, crypto companies have responded to the collapse of digital currencies by reassessing their plans for the future. In this scenario, while some laid off en masse, others chose to leave the sector.
“Sales in major digital currencies such as BTC correlated with the broader decline in equity markets, particularly in the tech sector. The crisis deepened with the collapse of the Earth ecosystem (LUNA), an aspect that may have eroded confidence in the sector”, they analyzed.
Major exchanges shudder
As you can imagine, in this “crypto winter” context, smaller companies were the most affected by the crisis. But that’s not to say that major exchanges and companies haven’t suffered.
Coinbase, for example, laid off 1,100 employees. That is, about 18% of its workforce. In addition, it stopped hiring. Exchange CEO Brian Armstrong pointed to a possible downturn in the market and highlighted the need to increase efficiency.
Likewise, Gemini, Crypto.com, BlockFi. For some players in the market, this “cleaning” of companies is not a bad thing. Instead, it’s a good chance to weed out bad projects from the market.