For the past seven days, shapeshift, a leading cryptocurrency company has been forced to let go close to thirty percent of its workforce. This is a move that saw the company lay off a total of thirty-seven employees.
Erik Voorhees, CEO and founder of the company, in a letter to the platform users and employees of the company, stated that the last cryptographic winter made it impossible for the company to continue operating normally. The company had no choice but to adapt to the worsening of the cryptocurrency market.
In the letter, the CEO stated that the worsening of the conditions had meant that the company had no choice but to dismiss a third of its employee base. By letting go of this staff, the company actually fired thirty-seven workers.
Lessons to learn from the winter crypto
The bull market experienced at the beginning of 2017 has seen many companies in the cryptocurrency sector start to change their operations. The bull market, which many states have been the biggest in history, has seen many companies, for example, ShapeShift, Bitmain and ConenSys begin to aggressively expand into other markets, some of which were definitely out of their normal base of operations.
It was during this period shapeshift also noted the growth of almost three thousand percent. Many of the cryptocurrencies already on the market at the time also saw a surge in their valuation, which saw it rise above eight hundred thousand billion dollars.
At the time, many exchanges had begun to record large volumes with many companies and startups in the crypto universe that received substantial investments in the form of venture capital. Many pioneering investors have also tried to diversify their portfolios by investing in emerging startup ideas.
Voorhees in his letter went on to explain that during the bullish periods, the company goes up and fast. And he is able to record rates that have never been seen anywhere in the crypto universe before. As such, it only makes sense for the company to even experience a recession when things become dramatic and the markets become severe.
However, as the cryptocurrency markets started correcting the damage caused during the winter recession, many digital resources have started to suffer losses between seventy and eighty percent of the highs seen previously. This also meant that the market would sooner or later start to struggle.
The experienced recession has also helped to reduce investment, with many investors unwilling to finance start-ups. This resulted in a total decrease in revenues and a possible reduction in the number of transactions carried out in encrypted markets.
Taking into account the fact that many companies had begun to expand into other segments of the market, which in some cases led them to invest in other sectors outside of finance, it meant that it would not be possible for them to continue operating for much longer. At one point, companies would have no choice but to reduce the number of their teams.