Huobi, the Chinese cryptocurrency giant, which is the former ‘big three’ exchange, has been doing exactly “Prepare for the worst, hope for the best.” The exchange has been running a profitable business and still makes money every month, but have been laying off staff and have been preparing for the worst due to this year’s bearish market.
In December, it was reported that both Huobi and the Chinese crypto mining equipment manufacturers Bitmain Technology had been laying off staff, but at that point in time, Huobi remained silent on their motives.
Livio Weng Xiaoqi, the chief executive of Huobi Global, recently told the South China Morning Post that the company has been treading very carefully. We don’t know how long the bear market would last but is still possible that we might struggle to survive. We need to have a plan beforehand and spend money very carefully.
Bitcoin prices hit the ceiling at the $20,000 mark in December 2017, and since then, the market has dramatically decreased to about 20% of its highest point. The ever-changing bitcoin prices, in the past 12-months, have dramatically affected the crypto exchanges than any other business in the sector.
Weng rightly indicated that nobody is sure about when and how the market would recover. Too many crypto-related businesses in the past planned to expand and intended to move forward based on the Bitcoin price which had stayed at its $10,000 mark, but that was a big mistake.
In December 2018, Huobi Group pointed out to the fact that their decision of laying-off their staff had more to do with them expanding their focus “on its core businesses and emerging markets.”
It has been a rough few months for the crypto exchange platforms, and more so to the employees. In the final quarter of 2018 and consequently, the beginning of 2019, a huge number of crypto exchanges and blockchain-related businesses reported that layoffs of the staff are being expected.
In addition to Bitmain and Huobi, other crypto companies including Shapeshift, Steemit, and the oldest UK crypto exchange Coinfloor have announced redundancies in their board.
Coinfloor which used to operate out of London since 2013 has approximately a staff of 40 people. They have cut down their employee number by half in October 2018 and said that these cutbacks were a “response to a changing market environment.”
Last week, ShapeShift Exchange announced that they would cut down their staff by 30% as an attempt to combat with the ongoing bear market. Erik Voorhees, the CEO of ShapeShift, has been very transparent regarding the decision and stated that the exchange’s drastic exposure to crypto was an intricate reason why the redundancies were present.
A plethora of crypto exchange have streamlined their operations and have plans to remain competitive in between this ongoing bear market. It might not be the right time for exchanges, but it has been even worse for the employees since they have been making their living by working in the crypto industry.