The bear market has taken its toll on many parts of the crypto space, from the inability for projects to attract new funds, to companies being forced to lay off employees.
We recently published a piece about Bitcoin Jobs that continue to rise despite the 2018 bear market. Although it is true that there is a surge in bitcoin/blockchain jobs (particularly in software development) it’s also the case that many high profile blockchain companies are being forced to trim down the size of their organization to be more cost-effective and efficient:
- Steemit, the decentralized social network recently laid off 70% of their staff. The company cited “the weakness of the cryptocurrency market, the fiat returns on our automated selling of STEEM diminishing, and the growing costs of running full Steem nodes” as the main reason for their layoffs.
- Civil, a blockchain project that was supposed to save journalism, failed to reach it’s ICO fundraising goal and was forced to cut back on the 18 news desks they had setup in locations around the world. To make things worse, employees alleged the company wasn’t paying its journalists and accused owners of repeatedly misleading staff over the potential value of their token.
- Lack of funding caused one of Ethereum Classics Development Team to shut down operations. The ETCDEV had even publicly shared a Twitter poll asking if their community would be willing to donate money to help them continue funding operations. In this poll, 59% of members said “no,” which is a clear sign that the team was no longer adding enough value to the crypto space to justify their existence.
- Consensys, which was founded by Ethereum co-founder Joseph Lubin, laid off 13% of their staff, and released the following statement: “Excited as we are about Consensys 2.0, our first step in this direction has been a difficult one: we are streamlining several parts of the business including Consensys Solutions, spokes, and hub services, leading to a 13% reduction of mesh members.”
- Status (SNT) cut 25% of their staff, losing significant amounts of the $64m they raised, which was still held in ETH (it could be worth as little as $15.3m now).
- Even Bitmain, a highly successful Bitcoin mining company, has been forced to close their blockchain development center in Israel and layoff 23 employees. They have also cited the recent collapse in price of cryptocurrency as a reason for the center being closed.
Many ICOs Didn’t Convert Their Funds On Time
These projects have been put in a tough situation. However, many of them have also made their problems worse by choosing to keep the funds they raised in ETH even as the price continued to decline. Rather than just working with the number of funds they raised, the chose to be greedy and speculate on their investments.
Today, there are still ICOs holding 95%+ of their treasury in crypto assets. We will continue to keep an eye on these projects as we expect they won’t last very long under current market conditions.