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From CCN.com: In the course of 2018, cryptocurrency trade recorded record profits, rounding up hundreds of millions of dollars in trading fees, even if the price of bitcoin fell to 80% from its historical high. However, as the crypto-bear market extends to 2019, cracks are forming in the hull of this once impervious industry.
How the Bitcoin Bears market is straining cryptographic exchanges
The #Bitcoin price history put through a sound generator. pic.twitter.com/Y8MRd812VJ
– Dennis Parker⚡️ (@Xentagz) 29 October 2018
Speaking in an interview with the South China Morning Post, Weng Xiaoqi, CEO of Huobi Global, said the bitcoin exchange giant could "struggle to survive" if the cryptocurrency market continues in its bearish trajectory.
"We do not know how long the bear market will last, so it's still possible that we will fight to survive," Weng said in an interview in his Beijing office. "We have to plan ahead and spend the money carefully."
This is a notable statement coming from Huobi, which is one of the oldest and largest exchanges of cryptocurrencies. Since its founding in 2013, Huobi has on several occasions been ranked as the world's largest bitcoin trading market.
Over the past 30 days, the platform has processed transactions for over $ 11 billion, limiting only Binance and OKEx (data from CoinMarketCap).
Weng says that Huobi is still profitable, but with trading volumes down 90% from its peak, the bitcoin bear market is starting to squeeze the company's margins.
Huobi confirms that he has fired 100 employees
CCN has previously reported that Huobi is one of several bitcoin companies that cut out their workforce in case the so-called Crypto Winter turns into a full-blown ice age.
Weng confirmed the layoffs in the interview, stating that the company left about 100 employees to reduce its global workforce to 1,300.
Huobi remains confident that his commitment to regulatory compliance will allow him to keep his competitors under control, particularly if regulators begin to crack down on other platforms. However, such repression could intensify the problems of the encrypted market, at least in the short term.
"Our biggest advantage over the competition is that we have licenses in all the major countries – we are the only one of the best global exchanges," said Weng.
The widespread layoffs affect the best companies of Crypto
Huobi is not the only giant in the cryptocurrency industry to suffer under the weight of the 13-month market decline.
Bitmain, which boasts an estimated 75% share in the cryptocurrency extraction hardware manufacturing industry, has initiated net budget cuts that will force it to lay off more than half of its global base of employees. In recent weeks, the company has closed or reduced operations in the offices of Israel, Amsterdam and Texas.
ConsenSys, an Ethereum development study with over 1,000 employees and a variety of projects built around the third cryptocurrency blockchain, 13 percent of its employees in December.
Just this month, ShapeShift, a cryptocurrency brokerage service led by the first bitcoin evangelist Erik Voorhees, fired a third of its workforce, admitting it had expanded too rapidly during the 2017 bull market fever.
Several other blockchain companies have set up cuts, including several armed with tens of millions of dollars in initial funding of coin offerings (ICOs).
Unless the market winds do not change in the near future and the Crypto Winter starts to melt, it seems that industry employees will be the ones left out in the cold.
Close-up image of Shutterstock
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