If you don’t think we’re in Crypto Winter yet, consider these headlines from the week: Gemini laid off 10% of its staff; Coinbase instituted a hiring freeze and rescinded accepted job offers; Mexico’s largest crypto exchange Bitso laid off 10% of its staff; and Argentina-based crypto exchange Buenbit laid off 45% of its staff.
The news is bad. And if you’re an engineer who got a letter from Coinbase canceling a job offer you already accepted, there’s no silver lining here. It’s enough to make someone sour on working in the crypto industry at all.
But if you zoom out, there’s reason not to panic.
Those calling this period the end of crypto (and there are so many saying it) clearly weren’t in this industry in 2018. During that time, in which Bitcoin tanked 70% after peaking at $20,000, I kept hearing the same refrain from crypto execs and entrepreneurs I’d welcome on Yahoo Finance live shows: “We’re putting our heads down and building now.” It was difficult not to scoff at that talking point back then, because what else could they say? But many of the tools and platforms built during that time became the key success stories of the pandemic-prompted crypto boom in 2020 and 2021. They really did build things.
This is why it’s reasonable for Dan Held, a Bitcoin O.G. who sold his price app ZeroBlock to Blockchain.com in 2013 long before he was a Twitter influencer with 600,000 followers, to declare that this Crypto Winter will be milder than past winters.
Held joined me for a chat at CoinMarketCap’s virtual conference last week and said people are now going back “from HODL to BUIDL… The original Bitcoin ethos was all about building. Back in the early era, everyone had their own side project because they needed to go build something to make the ecosystem better. … Now we’ve got A-players across all of tech wanting to come build things in the crypto ecosystem, we’ve got VC funds raising tens of billions of dollars in aggregate to go deploy into this ecosystem, so I don’t think this winter is going to be as harsh as the other ones.”
Another crucial point about this Crypto Winter is that non-crypto tech stocks aren’t faring any better right now. Pandemic darlings Peloton (PTON) and Zoom (ZM) are down 60% and 40% this year, respectively. How about those once-hallowed FAANG names? Facebook (changing its stock ticker to META next week) is down 45% this year, Amazon (AMZN) is down 28%, Apple is down 20%, Netflix (NFLX) is down 68% (goodness gracious), and Alphabet (GOOG) is down 22%.
No matter what, rescinding job offers is a terrible look, and Coinbase’s reputation will now take yet another P.R. hit. But companies often have to cut head count during downturns—it’s what they do to survive. When other large companies make job cuts (like in March 2020) the media reaction is not to declare their industry dead. But crypto, in the big scheme of things, is still so new (even after 13 years for Bitcoin) that skeptics still insist the entire thing could collapse.