By George Ward
The bear market has reduced institutional demand for Bitcoin and other cryptocurrencies. Since the summer of 2022, most of the personnel at digital asset management Osprey Funds have been let off.
The layoffs highlight the persistent operational difficulties brought on by the industry’s protracted bear market. According to reports, Osprey Funds presently employs less than ten people after firing 15 employees since the summer.
According to the company CEO Greg Kling, Osprey was not in danger of shutting down operations, and the layoffs were commensurate with the market slump. Osprey provides authorized clients with access to financial products focusing on cryptocurrencies.
Institutional interest in cryptocurrency products has drastically decreased over the past year, reflecting the muted demand for riskier assets after the tightening of global liquidity conditions. It wasn’t just crypto that was impacted; 2022 was the worst year for world equities and bonds in more than a decade.
There are some promising signs that institutional investors are returning to cryptocurrencies. 62% of institutional investors have increased their exposure to digital assets in the previous year, according to recent on-chain data.
Since the summer, the number of layoffs in the cryptocurrency sector has increased, with leading exchanges announcing employment cutbacks amidst profit drop-offs.
A few months after reducing its staff headcount by 18%, Coinbase allegedly fired up another 60 employees in November. Kraken also said that 30% of its global personnel would be let go.
Crypto Firms And More Staff LayOffs
In addition, other crypto firms recently announced staff layoffs or have plans to lay off their staff members. Crypto software firm, Consensys recently announced plans to let go of about 100 of its staff.
Also, the NFT platform, SuperRare, says it will reduce its staff strength by 30% while the focus of those not fired will be on improving the platform’s technological infrastructure. Similarly, crypto exchanges, Huobi and Genesis announced that they would sack a large percentage of their staff.
Despite constant denials by Justin Sun (a Huobi board executive), there were reports that the company plans to lay off 20% of its workforce. Also, Genesis announced that it had sacked 62 staff members, constituting nearly 30% of its workforce.
Many crypto firms continue to suffer from last year’s financial meltdown, and these staff layoffs are one way they are coping with the current market downturn.