Something strange is happening in crypto. Sure, the market’s shrinking, prices are plunging and major players are blowing up. This crypto market crash may be forever? But I’ve started to wonder if there’s something more we don’t understand. I feel like we’ve kind of hit a bottom in the market, yet every week another company is laying off even more people.
Is this the Cryptocalypse?– Crypto market crash
What’s going on here? Do these companies know something we don’t? And what do these mass layoffs say about the health of the industry and the future of crypto? Is crypto market crash going to happen? I needed to find out. The losses in the last year, and profits, jobs and whole companies are reason enough to ask the question: Is this the Cryptocalypse? Is this the absolute end of crypto forever and ever? – FOREVER. No, not even close.
But things are chilly out there. Since its peak last November, crypto has lost 70% of its total market value. Fluctuations over that time are in the with conditions this bad, a few companies have already gone the way of the splendid poison frog. You’ve heard the saying desperate times call for desperate measures. But for a lot of businesses out there, both in crypto and traditional markets, these are desperate times. Which is why we’re seeing so many companies taking such desperate measures, like laying off 20%, 30%, even 50% of their entire workforce.
When it looks like we’re entering into a potentially years long bear markets, even companies like Crypto.com are scaling back to the bear minimum, pun intended, in order to survive the long winter. But as the great Seven of Nine once said, so besides just muddling through this, and again, what do these crypto companies know that we don’t know?
How crypto started to get acceptence?
The first thing we need to do is look at who’s really responsible for taking us to the bottom and the behavior that got us there. After the utter ruckus of 2020, which saw mistrust in traditional governments, people from across the political spectrum again became more open to the idea that, hey, maybe there’s something to this Bitcoin I’ve been hearing about. Also, a lot of people were just kind of at home in front of their computers where crypto comes from, looking for something interesting to click on.
Maybe it was institutional mistrust, maybe it was boredom or maybe there were just a lot of people who finally had the time to actually research what a Bitcoin is. But whatever the reasons were, a lot of people bought in and crypto started to gain acceptance as a legitimate currency, as a potential solution to global and local problems. And as a result, prices skyrocketed across the market. And to be clear, it’s not really the public’s fault that there was a bubble. Bubbles don’t occur just as a result of mass public interest.
Sure, that does help, but I tend to think it’s more about what a few bad not that guy, more like these guys, did with all that interest, behaving recklessly believing their own hype and cutting corners on risk assessment. Many companies believe this sudden expansion was simply here to stay. They took out massive loans, bought even more cryptocurrencies and expanded their operations aggressively hiring tons of new staff. Classic bubble behavior.
So, when all s**t popped, not in the good way, these companies couldn’t pay the loans, the rent or the people that they hired. So, they took the public hype and they seized it. And when things came crashing down, or crypto market crash happens, the first thing to go are those extra people they hired.
How people lost jobs in crypto market crash?
Why is that the case? And why does it keep happeningeven though the markets have been relatively flatin the past few months?We need to look at how big this problem is.And I quickly found out. It isn’t easy to pin down an exact number of how many people have been laid off, especially as some companies, I’m looking at you Cypto.com, have apparently been under-reporting how many people they’ve axed due to this large crypto market crash happening.
But a fair estimate is that across the industry at least 3500 people have lost their jobs from big crypto companies. But why are companies doing this now? Well, actually there’s a lot of reasons that companies lay off employees. But in cases like this it usually has to do with quarterly reports. These reports are a summary of financial statements like balance sheets, income statements and cash flow statements issued by companies every quarter.
This isn’t just something companies do for fun. Publicly traded companies are required to file their reports with the SEC. But any company with investors is going to have some kind of quarterly report, which is every single big crypto company. And beyond these financials, they typically contain an important set of data called Key Performance indicators. These are meant to clearly show that the company is meeting its goals and is likely to deliver long-term profits to its investors. Can gala coin reach $100
See quarterly reports give a snapshot of what’s happening now in the company. But their real purpose is to inspire projections, projections that they’ll be profitable in the future. That way investors are kept happy and their money is kept in the companies. So, when KPIs are less than promising, the company’s management has some explaining to do to all these investors. And when a company is struggling to make a profit, like in a bear market, they need something to point to and say Hey, at least this thing is good in this crypto market crash. And typically, that means quickly cutting costs now in order to show that they’ll make more money in the future.
And when they need to cut costs in a hurry, a go-to move is to just let a bunch of people go because it immediately reduces their operating costs. This can be a huge, mega huge chunk of change. CoinFLEX, they’re a derivative platform said the reason they laid off so many workers are that it’ll actually cut costs by 50% to 60%.
But what about all the non-human assets?
Why not sell those first?Again, the key here is speed.It takes time to move into cheaper offices, it takes timeto get out of a lease it takes time to sell assetslike stock, real estate or even office furniture and atthe end of the day, like literally at the end of day,it only takes about 5 seconds to hand someonea cardboard box and a severance check. – You’re all fired. All four are fired.
What about the severance check?
If the point is to cut costs but they’re still paying people, how does that add up? When it comes to quarterly reports, severance pay is considered a non-operating expense which means it doesn’t have any impact on the company’s quarterly net income. Remember, this is all about projections and the look of the company. It’s not about what they have so much as what they’re going to have. And since severance is typically paid immediately, it’s not a part of the company’s ongoing expenses and therefore it can be left out of future cost projections. This is why corporations make a distinction between being fired and being laid off.
People are fired because their company wants them out of the office but people are laid off because their company needs them off the books. You would think that laying off employees would be the last resort in bad times but the sad truth here is it’s often the easiest way to make your company look better to investors. As desperate as those sounds, it actually presents a unique opportunity for companies to establish themselves as one of crypto’s foundational brands.
And the way you do this is by surviving periods of sustained crisis, gaining invaluable experience and building a reputation as a resilient brand that will last for years to come. This is exactly what investors want. So, a short term a solution as layoffs might be, if it means lasting long enough to become crypto’s Ford, Chase or Amazon, what’s the loss of a few workers compared to becoming a permanent brand?
Which companies thriving in these bear crypto market crash?
Remember, while more than half of all dot com companies didn’t survive the early 2000s bubble burst, even the ones that did survive struggled, including Amazon which lost more than 90% of its value. But by keeping it together and doing what’s necessary to still be around when times are good again, Amazon is now worth more than the entire crypto industry. And before we talk about what’s next in this wild ride, I need to tell you about another company that’s thriving in these markets – FTX, they’ve been sponsoring me for quite a while and all throughout this bear market they’ve grown bigger and just bought a bunch of their competition.
But I think you should try them out not only because it helps me produce these articles, but because it’s the only place where you can trade cryptos and stocks on the same platform. This is big. It feels like the future when you do it. And if that’s not an incentive enough, they’ll actually give you $25 for free if you use the link down below and trade just $250 in your account. Okay, so what’s next?
Future of cryptocurrency market?
This is the question every investor and crypto company is asking themselves right now. How do we make to the part when things are good again? And the answer isn’t exactly sexy, because now is the time for companies to focus on tight budgetsand to more or less waitout the storm as it corrects through a phase called consolidation. This means that even though prices canbe erratic over time, they simmer downand stabilize to a somewhat predictable range.
History of last Crypto market collapse
See, after periods of boom and crypto market crash, it usually takes some time for a market to adjust. And by market, I mean people. We’re kind of like a cat who jumps up on a hot stove. They’re not going to do that again next week, but how about six months from now? Maybe they’ll test it out, and when they don’t get burned, they’ll do it again and again, building confidence to eat your rotisserie chicken off the countertop. So, over the roughly six months of the 2017 crypto boom and the 2018 crypto market crash, Bitcoin prices stormed up and down with a low of around $6,000 and higher on $19,000.
Then, over the next six months, though, prices continue to fluctuate, they did so in a much more tranquil range between $6,000 and $9,500 That’s consolidation. After that, prices remained relatively stable until everything blew up in 2020. We were cats fearlessly stealing rotisserie. We felt like geniuses until the stove was left on again, and Bitcoin dropped in value by $45,000. But while it feels bad, the price it’s dropped to is around $20k in big crypto market crash.
That’s higher than Bitcoin’s value in its entire history before 2020. In the last two months, through a steady onslaught of bad news about layoffs, fraud and bankruptcy, as well as some periodic good news, Bitcoin actually held its price for the most part. Now, here’s the thing, we unfortunately need more time. Our paws are still burned, and this isn’t a long enough time period to say for sure that we’ve entered into a consolidation phase. But whatever the future holds, there are signs that plenty of companies are going to weather this storm.
Just recently, CoinFund announced a $300 million fund focusing on early-stage crypto investments. In March, a new crypto fund, Haun Ventures, raised $1.5 billion. In May, Andreessen Horowitz raised $4.5 billion, explicitly earmarked for crypto investments. The point is, there’s still progress every month, even though it seems choppy and scary from the surface. So, if you’re wondering what you’re probably always wondering about crypto, is this the time to get in, or is this the time to get out?
Should I get out of crypto market?
The answer depends on whether or not the worst part is more or less over for the next six months or so, look for crypto to hold a relatively stable period of fluctuation, probably between $20K and $30K. And don’t forget about outside forces. What are the other markets up to? Because stocks and monetary policy also sway crypto. Are there regulations actually happening in crypto? Keep your eyes peeled, because things will eventually show signs of relief, and you want to be there to capture it when those things happen.
And whatever happens, whoever gets fired or laid off, whichever companies turn out to be a scam or file for bankruptcy, and whether or not good news actually turns out to be good news, I’ll be right here to walk you through it.
Is crypto market crash over?
The answer depends on whether or not the worst part is more or less over for the next six months or so, look for crypto to hold a relatively stable period of fluctuation, probably between $20K and $30K. And don’t forget about outside forces.
Is crypto market gonna crash?
If the market get stables between $20K and $30K then their is possibility to market to get recovered. If we see high volatility, then may crash. It depends on big whales.
When will the crypto market crash end?
It may take 6 months or a year to recover the crash or even longer. Now is the time for companies to focus on tight budgetsand to more or less waitout the storm as it corrects through a phase called consolidation.