CEO Brian Armstrong revealed in an open letter Tuesday that the “difficult decision” to lay off about 1,000 employees was made to ensure “we stay healthy during this economic downturn.”
Armstrong warned of an imminent economic slowdown that could lead to an extension of the latest cryptocurrency bear market, Armstrong wrote: “It appears that we are entering a recession after a 10-year economic boom. .”
Although Armstrong said future economic conditions are difficult to predict, the company is planning “for the worst so that we can run the business through any environment.”
Cryptocurrency
Will financial inclusion be driven by digital currency adoption
Will financial inclusion be driven by digital currency adoption
Coinbase ‘s market capitalization collapsed as investors continued to sell cryptocurrencies, bailing out risky assets in anticipation of sharp interest rate hikes to tackle inflation.
Bitcoin reached an all-time high of $69,000 in November 2021 and since then, the world’s most valuable cryptocurrency has lost two-thirds of its value, slipping below $23,000 on Tuesday and losing about 25 percent of its value since Friday.
Meanwhile, Coinbase’s stock is down about 80% this year and 85% since its initial public offering in April 2021. The company, which was once worth about $100 billion, is now less than $12 billion.
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In his blog, Armstrong admitted that Coinbase “grown very, very quickly” with the cryptocurrency trading boom in early 2021.
“While we were doing everything we could to get this right, in this case it became clear to me that we were hiring too much,” he said.
Other market players are also suffering, Celsius Network, a major crypto lender, said Monday that it will suspend all withdrawals and transactions due to “extreme market conditions.”
