BlockFi Cuts Staff by 20% as Bitcoin Plunges

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Crypto lender BlockFi has also joined the list of crypto-related companies that have been laying off their staff amidst the volatile conditions of the market. The company announced that it was cutting down its staff by 20%, as digital currencies have seen a dramatic downturn recently and concerns about a weakening economy are rising. The announcement was made on Monday in Tweet by Zac Prince, the company’s chief executive.

The CEO stated that the change in macroeconomic conditions had taken its toll on BlockFi and had its growth had been negatively affected.

BlockFi’s Background

Launched in 2017, BlockFi was founded by venture capitalist Peter Thiel and in recent years, the crypto lending platform has recorded dramatic growth. This was primarily because of the rising crypto prices and the low costs of borrowing. At the end of 2020, the company had about 150 employees in its workforce and it had expanded this to a count of 850, before the latest cut.

The company has managed to raise more than $957 million since it was founded. Last year, BlockFi had reportedly been aiming to achieve a valuation of $5 billion. It had become popular because it is a savings product that allows users to stake their digital currency holdings on the platform and to earn interest on them. Reports last week had showed that the company was conducted a funding round that would put its valuation around $1 billion.

Crypto Companies Cutting Down Staff

There are a number of crypto companies that are looking to reduce costs, as trading volumes are down because investors are pulling out of riskier assets. Bitcoin has already lost almost 50% of its value in this year and it shed 15% on Monday alone. Likewise, ether has also lost two-thirds of its valuation in this year and it started the week with a loss of 16%. The valuation of the crypto market has also plummeted from its $3 trillion valuation achieved in November 2021 to less than $1 trillion today.

Therefore, it is not surprising that crypto companies are cutting down their workforce, just like BlockFi. Crypto.com had recently let go 260 people and the Gemini exchange had also announced that it was reducing its staff by 10%. Coinbase has also followed suit, first by pausing its hiring process and now finally cutting off 18% of its workforce.

The CEO of BlockFi said that the company is in the crypto space for the long term and they want to achieve profitability. Not only is the platform cutting down jobs, it is also cutting down executive compensation, spending on marketing and eliminating non-essential vendors. The headcount growth will also slow down. However, Prince was quick to clarify that the cuts would not impact their customers in any way. He tweeted that the quality of services will remain the same and their funds will also be kept safe.

He also said that they will continue to operate all products and platform normally in order to reassure people who may be worried.