Crypto hardware wallet maker Ledger is laying off 12% of its workforce, reported Bloomberg on Thursday.
Ledger is the crypto industry’s leading maker of so-called hardware wallets – physical devices the provide the secure storage of an individual’s private keys, the password needed for them to gain access to the digital assets sitting in their crypto wallet address.
According to the company’s LinkedIn page, Ledger currently has 734 employees, meaning potential layoffs of around 90.
In an email sent to staff on Thursday, Ledger’s CEO and Chairman Pascal Gauthier said that “macroeconomic headwinds are limiting our ability to generate revenue and “we must continue to make decisions for the longevity of the business”.
Ledger the Latest Victim as Crypto Winter Drags On
Ledger’s plans to reduce the size of its workforce come as the broader crypto industry remains stuck in a significant downturn that has seen countless other crypto firms also reducing the size of their respective workforces over the last year and a half.
2020 and 2021 were years of spectacular growth for the crypto industry, with blue chip coins like Bitcoin (BTC) and Ether (ETH) hitting new all-time highs, many altcoins exploding to monstrous market capitalizations and non-fungible token (NFT) and Decentralized Finance (DeFi) markets experiencing tremendous growth.
However an unexpectedly powerful surge in global inflationary pressures forced major central banks like the Fed to slam the breaks on the economy with aggressive rate hikes and liquidity tightening in 2022, with financial conditions remaining at historically tight levels even as 2023 draws to a close.
This tightening, plus other catastrophes such as the collapse of the Terra ecosystem and FTX bankruptcy, took the wind out of the 2020/2021 crypto bull market.
Bitcoin remains 60% lower versus its 2021 all-time highs while many major altcoins are still down over 90%.
DeFi markets remain a shadow of their former selves, with trade value locked (TVL) across all chains last around $78 billion versus well over $300 billion in late 2021,as per DeFi Llama.
Spot trading volumes across major exchanges, meanwhile, remain stuck at their lowest levels since late 2020, coming in at just over $300 billion in September versus their May 2021 peak of more than $4 trillion, as per data presented by The Block.
Poor market conditions mean that many crypto firms have seen their revenues contract significantly.
According to a CoinDesk tracker that counted crypto layoffs, just under 30,000 crypto sector employees were sacked between April 2022 and March 2023. That number has surely risen substantially in the months since.
When Will the Crypto Winter End?
Despite the broad contraction in the crypto market over the course of the past year and a half, there remain plenty of reasons to be optimistic.
Bitcoin is up more than 75% from its 2022 lows amid optimism about crypto’s long-term future as institutional investors continue to signal strong interest, as major firms (like PayPal with the planned PYUSD stablecoin) make forays into the space and as developers continue to expand the technologies use case.
Investors are also growing increasingly optimistic that the worst is behind us when it comes to the tightening of global monetary conditions, with Fed rate cuts in the pipeline for 2024.
Meanwhile, spot Bitcoin ETFs, including those created by asset management giants such as BlackRock, Vanguard and Fidelity, are expected to gain approval next year, further accelerating institutional adoption, while the Bitcoin halving is also incoming – an event that has historically been a bullish Bitcoin catalyst.
A sustained rise in crypto prices would likely attract speculators and retail investors that lost interest in crypto/were stung by it during the 2022 downturn, which should mean the potential for higher revenue amongst crypto firms and the beginnings of a new crypto spring.
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