From CCN.com: Have you ever heard the expression ‘hope for the best and prepare for the worst’? Chinese cryptocurrency giant Huobi, a former ‘big three’ exchange, is doing exactly that. Although the exchange is a profitable business that still makes money every month, they are laying off staff and preparing for the worst amidst this current bear market. Just in case!
CCN reported in December that both Huobi and the Chinese crypto mining equipment manufacturers Bitmain Technology were laying off staff, but at the time, Huobi remained relatively silent on their motives. Until now.
Huobi is Unsure of the Future
The chief executive of Huobi Global, Livio Weng Xiaoqi, recently told the South China Morning Post that the company is treading carefully. When discussing the move for the first time in the media, Weng told the SCMP at Huobi’s Beijing office:
We do not know how long the bear market will last, so it is still possible that we will struggle to survive. We have to plan in advance and spend money carefully.
Since Bitcoin prices hit the ceiling at the $20,000 mark in December 2017, the market has dramatically decreased to 20% of its highest point. The ever-decreasing bitcoin prices over the past 12-months have dramatically affected crypto exchanges more than any other business in the sector.
Although the jury is still out as to why the crypto market bottomed out so much in 2018, Weng rightly pointed out that nobody is quite sure when and how the market will recover. Too many crypto-related businesses last year planned to expand and move forward based on the Bitcoin price staying around the $10,000 mark. It was a gross mistake.
Back in late-December 2018, Huobi Group did point out that their decision to lay-off staff was more to do with expanding its focus “for its core businesses and emerging markets,” so it wasn’t all doom and gloom like the Bitmain redundancies.
Tough Times for Crypto Exchange Employees
It’s been a rough few months for crypto exchanges, and more appropriately, their employees. In the final quarter of 2018 and the beginning of 2019, a myriad of crypto exchanges and blockchain-related businesses have reported expected layoffs of staff.
Alongside the aforementioned Bitmain and Huobi, other notable crypto companies such as Shapeshift, Steemit, and the oldest UK crypto exchange Coinfloor announced redundancies across the board.
Coinfloor had been operating out of London since 2013 and had approximately 40 staff. They cut their employees by half in October 2018 and said the cutbacks were a “response to a changing market environment.”
Just last week, the ShapeShift Exchange announced they would be cutting their staff by 30% in an attempt to combat the ongoing bear market. The CEO of ShapeShift, Erik Voorhees, was very reflective on the decision and cited the exchange’s drastic exposure to crypto as an intricate reason for the redundancies.
The indecision of the future of the markets is why we are currently seeing a plethora of crypto exchange streamline their operations to remain competitive amidst this ongoing bear market. It might not be a great time for exchanges, but it’s even worse for the employees who make their living working in the crypto industry.