Crypto Markets Today: Kraken Becomes the Latest Industry Giant to Cut Its Workforce
Crypto exchange Kraken is laying off 30% of its global staff – around 1,100 people – in response to the crypto market downturn, the company said Wednesday.
“Since the start of this year, macroeconomic and geopolitical factors have weighed on financial markets. This resulted in significantly lower trading volumes and fewer client sign-ups,” Kraken said in a blog post.
The crypto market has sunk this year, with bitcoin (BTC) losing 63% of its value since the end of 2021 and the total crypto market cap down by more than two-thirds in the past 12 months.
Companies that ramped up staffing levels during the preceding boom years have had to cut back during the decline. This month alone, publicly traded exchange Coinbase (COIN) trimmed 60 positions, and Unchained Capital, a bitcoin financial-services firm, shed more than 600.
As recently as June, Kraken said it was looking to expand as other companies laid off staff, flooding the market with experienced labor, saying it wanted to hire another 500 people.
Crypto prices rise: Bitcoin (BTC) cracked the $17,000 threshold for the first time since the early part of November. The largest cryptocurrency by market capitalization was recently trading at about $17,060, up 3.6% over the past 24 hours. Ether (ETH), the second-largest crypto in market value, was recently changing hands just below $1,300, a 6.6% gain from Tuesday, same time. Other cryptos were largely moving upward, with UNI, the token of the smart contracts-based Uniswap platform, up more than 6% and popular meme coin DOGE rising more than 3%.
But November is dismal: Bitcoin fell in value by more than 18% for the month and ether tumbled 21% amid the collapse of crypto exchange giant FTX and the ensuing fallout. FTX filed for Chapter 11 bankruptcy protection little more than a week after CoinDesk reported irregularities on the balance sheet of its trading arm Alameda Capital, and other companies with exposure to FTX have been forced into survival mode. Still, a few tokens soared above the mess, including BAND and LTC, which jumped 57% and 38%, respectively.
Equity markets enjoyed a memorable day as investors, buoyed by Fed Chair Jerome Powell’s dovish remarks at the Brookings Institution’s Hutchins Center on Fiscal and Monetary Policy on Wednesday, sent the tech-heavy Nasdaq up 4.4%, and the S&P 500, which has a strong technology component, and Dow Jones Industrial Average rising 3% and 2.1%, respectively. Brent crude oil, a measure of energy markets, sank 0.2%.
A key tone shift in crypto markets during the month was just how dramatically they diverged from the path of traditional markets. Stocks rose as investors processed speculation that the Federal Reserve might slow the pace of interest rate hikes as soon as December. The S&P 500 is up 2.2% in November, while gold climbed 7.8%.
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