Crypto is an ever-changing industry, characterized by low stability and extreme volatility
2023 has begun and there are already subtle signs of crypto recovery. There are still many investors who have been burned by the experience of Ftx, the crack of the first cryptocurrency exchange, which took place in November last year and led to: runaway deposits, bankruptcy risks and market turmoil. Unfortunately, the crash that occurred at the end of 2022 also had a powerful effect on other market players, who are now forced to reduce their workforce to compensate for the rapid market trend. However, all is not lost, of course
The Case of Silvergate and Genesis
It is the crisis of confidence that has spread in the industry that puts the future of Silvergate in serious danger, which has caused its digital deposits to collapse by almost 3.8 billion. A real escape that forced the institution to sell assets, causing a 46% fall in shares on the stock market. The company blamed the capital flight on a “crisis of confidence in the crypto ecosystem,” which has led to “many industry participants moving into a precarious position on digital asset trading platforms.” To keep its balance sheet highly liquid, Silvergate sold $5.2 billion worth of debt, while also announcing the layoff of approximately 200 employees. The same Genesis Music, which jointly with Silvergate and Huobi announced workforce reductions in an attempt to reduce the weight of boat and return the company to float. As for Genesis, however, what’s more dubious isn’t the layoffs being announced, but the possibility that the company is filing for Chapter 11 bankruptcy.
Reduction of staff
That mass reduction is not only an issue for tech-digital companies, but also concerns the crypto sector. In the last few hours, the crisis has actually also affected the trading platform Huobi, which has announced that it will reduce its staff by 20%, to maintain a “very light team”. The announcement follows brokerage firm Genesis Global Trading, which was forced to cut 30% of its workforce, while financial services firm Silvergate, aided by a hemorrhaging of deposits, expected to cut the equivalent of 40%. of his employees.
There is still a future for crypto
However, the last word has not been said. Many times in history, before finding its stability, the market has had to suffer a little and everyone has seen the collapse of the most important and richest sectors of the economy.
The major shock that hit the industry in recent months may have given a corrective blow to the entire world, considering that cryptocurrency is not created as a mere tool of speculation, but as a legitimate means of payment and money exchange, and an alternative method. in current currency.
Once this crisis has passed and the market has been freed from frequent speculators, the world of cryptocurrencies will be able to recover again, thanks to a good position within the markets and strengthening its services.
In recent years, hundreds, if not thousands of new cryptocurrencies have been born, all cryptocurrencies that are often accompanied by NFT projects, did not bring any additional value to the user, except simple speculation and profit.
In the coming months we will see how the world of crypto will be able to integrate with our daily life and if the main currencies will be able to establish themselves and provide very useful services to the end user.