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Against the general expectations, the crypto market nosedived with the collapse of Terraform Labs in May and the implosion of major lending service providers in the space.
Bitcoin infrastructure service provider NYDIG has reportedly cut off as many as 110 staff, a figure that represents 33% of its entire workforce. The news was first reported by the Wall Street Journal (WSJ) and highlights how the most established companies in the digital currency ecosystem are not entirely immune to the pangs of the crypto winter.
According to sources who spoke to Coindesk, the NYDIG retrenchment has been ongoing for weeks now without so much of the move leaking to the public.
“It’s like a trading desk mentality where nobody talks to anyone,” one former NYDIG employee said. “You can disappear and nobody will know for months.”
NYDIG has represented a movement that seeks to bring Bitcoin trading to everyone through the “Bitcoin for all” campaign. The company raised the sum of $1 billion to build a Bitcoin platform that will grant institutions and startups avenues to integrate Bitcoin-related products into their businesses.
Against the general expectations, the crypto market nosedived with the collapse of Terraform Labs in May and the implosion of major lending service providers in the space. The ripple effect of these market events resulted in a massive slump in the price of Bitcoin from above $68,000 in November last year to around $19,000 at the time of writing.
The broad-based market plunge impacted the company’s retail banking drive in ways not previously envisaged.
“NYDIG put all their eggs in this banking strategy, but they realized that there was no way that these banks were ready,” the former employee told CoinDesk. “They blew through all this money telling a story that they would bring bitcoin to the masses. Their core strategy was blundered.”
NYDIG Workforce Cut: An Industry-Wide Trend
The headwinds NYDIG is facing per the cut in its workforce are not peculiar to the company alone. In fact, the first response from most Virtual Asset Service Providers (VASPs) is to retrench their workers in order to position their businesses right to survive crypto winter.
From Coinbase Global Inc (NASDAQ: COIN) to Gemini, crypto companies in the United States and beyond have cut down staff strength in recent times.
The staff adjustment was also experienced amongst the top management staff at NYDIG. The company’s Chief Executive Officer Robert Gutmann and President Yan Zhao were replaced by Tejas Shah and Nate Conrad. Gutmann and Zhao returned to Stone Ridge Holdings, the parent company of NYDIG that was co-founded with Ross Stevens in 2012.
It is unclear if the NYDIG cut is a one-off thing or whether more cuts are still on the way. For now, the company’s recurrent expenditure seems sufficiently trimmed down.