By Jordan Valinsky, CNN Business
Crypto exchange Coinbase is laying off 18% of its employees as the digital currency market continues to crash.
CEO Brian Armstrong said in an open letter on Tuesday that the “difficult decision” to lay off about 1,000 employees was made to ensure “we stay healthy during this economic downturn.” The exchange has more than 4,900 employees, according to its website.
Armstrong warned of an impending economic downturn that could prolong the latest crypto bear market.
“We appear to be entering a recession after an economic boom of more than 10 years,” Armstrong wrote. “A recession could lead to another crypto winter and could last for an extended period.”
Although Armstrong said it’s difficult to predict future economic conditions, the company plans “for the worst so that we can operate the business in any environment.”
Bitcoin Collapse Deepens: Prices Fall; a major lender stops withdrawals, exchanges and transfers
Coinbase’s market value has imploded as investors continue to sell off the crypto, bailing out risky assets in anticipation of steep increases in interest rates to fight inflation.
Bitcoin reached an all-time high of $69,000 in November 2021. Since then, the world’s most valuable cryptocurrency has lost two-thirds of its value, falling below $23,000 on Tuesday. It has lost about 25% of its value since Friday.
Meanwhile, Coinbase shares are down around 80% this year and 85% since its April 2021 IPO. The company, once worth nearly $100 billion, is now worth less than $12 billion. dollars.
In his blog post, Armstrong admitted that Coinbase “grew too quickly” as crypto trading exploded in early 2021.
“Although we did our best to make sure everything went well, in this case it is now clear to me that we have over-hired,” he said.
Other market players are also struggling. The Celsius Network, a major cryptocurrency lender, said on Monday that it was suspending all withdrawals and transactions due to “extreme market conditions”.
– Anna Cooban of CNN Business contributed to this report.
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