- Coinbase has reduced its company growth expectations and scaled back its hiring plans
- The company will “slow hiring” and focus on its core business areas
- The tone of the announcement suggests that Coinbase thinks a bear market could be coming
Coinbase has announced that it is to scale back on its hiring process, blaming the market downturn for the need to focus strictly on core operations. In a note that was reminiscent of the kind that came out on a weekly basis during the 2018/19 bear market, Emilie Choi, Coinbase’s President and Chief Operating Officer, stated that the downturn in the market in 2022, exacerbated by the Terra/LUNA collapse, had led the company to “reprioritize our hiring needs against our highest-priority business goals.” Coinbase’s share price has reflected the Bitcoin price in 2022, although the statement assured investors that the hiring reduction was “not expected to have any material impact” on the company’s long term plans.
Coinbase Preempting Bear Market
Choi’s statement began by saying that Coinbase had originally planned to “triple the size of the company”, but that the performance of the crypto markets in the first five months of the year have led to the company scaling back its plans:
Given current market conditions, we feel it’s prudent to slow hiring and reassess our headcount needs against our highest-priority business goals.
It would be odd for a company to change its plans so drastically after less than half of the year in question has passed, which suggests that Coinbase believes that an extended correction is on the cards.
It’s clear the company was caught offside by the poor performance of the crypto markets in the first half of 2022, but changing growth expectations purely on a 56% pullback is a strange move and is suggestive of a preemptive change in order to cope with a prolonged bear market.
Further evidence of Coinbase’s bear market preparation comes through Choi’s sign off by saying that:
We know this is a confusing time and that market downturns can feel scary. But as we said at last week’s Town Hall, we plan for all market scenarios, and now we are starting to put some of those plans into practice.
Tl:dr – Coinbase is planning for a bear market.