Crypto winter appears to be in full swing, with more victims being lost to the frosty crypto climate every week. Last week, Hosho announced that it was cutting its workforce by 80% in order to keep operations running. With a lack of ICOs launching and the low price of cryptocurrencies, companies operating across the board are starting to scale back operations in a bid to survive the crypto winter. Many firms are making last-ditch efforts to secure funding through IPOs or from VC firms, but very few are succeeding.
Crypto Exchanges Feeling the Pinch
As crypto markets dip lower and lower, less and less traders are trading crypto. As the total volume of trades falls, so too does the commission made by exchanges – generally their only source of income. Coinsquare is just the latest victim of circumstances and has had to lay off 40 employees in order to keep operations running for a while longer.
Regulations Taking Their Toll
People around the globe are praising the regulations governments are pushing out, but it’s hurting crypto exchanges badly. In order to keep up with regulatory requirements. Exchanges like Coinsquare have to drop projects in order to adhere to the latest amendments. On top of this, listing new coins has become increasingly difficult, meaning exchanges have less bargaining power than they did a year ago.
Even the Giants are Falling
You can only help but feel sorry for the little guys when it comes to a crypto winter like the one we are currently facing. It’s been so severe that even giants are falling all around. Leaving gaping holes in various sectors of the crypto world. Just after Christmas, Bitmain laid off its entire Bitcoin Cash development team in a bid to cut costs and streamline. After losing more than $740 million before it engaged in a hash war, Bitmain looks more and more like it will vanish into the ether before the crypto winter is over.
An Uncertain Future
Nobody knows exactly when the bear market will end, so we have to buckle up and ride out this crypto winter. This is leaving many firms with an uncertain future, and as regulatory requirements bump up running costs, now is the last call for firms to secure funding before they risk collapse. If the winter lasts much longer, we could see more firms – both big and small – start to reduce staff numbers in a bid to survive.
Unfortunately, winters are part of the economic cycle of all industries. Following the intense boom of the crypto world back in 2017, winter is taking its toll on a huge number of young companies. The firms that survive the crypto winter are likely to come out stronger than ever and dominate the market as clear leaders of the industry.