Binance Unfazed by Crypto Crash, Plans to Continue Hiring
As the crypto winter continues to bite harder with no imminent end in sight, its effect is taking a toll on firms within that sector. The downward price movement, which initially affected retail investors, has led to the underperformance of several crypto companies like Gemini and BlockFi, forcing them to cut back on hiring or downsizing.
However, Binance, the world’s largest crypto exchange, says it has a healthy war chest capable of seeing it through this bear market. Consequently, the company listed over 900 global job openings in May. Meanwhile, Binance.US, the company’s North American arm, revealed on Twitter that it was also hiring.
Gemini, BlockFi, and Coinbase Freeze Hiring
The crypto market has been hit hard recently, from the Russian-Ukraine war to growing inflation and China’s covid lockdown. Consequently, several crypto firms have announced measures to cope with the current price slump amid wide-ranging macro headwinds. The steps employed range from job cuts to rescinding offers of employment and reduction in hiring.
First, Gemini, which recently signed a deal with JP Morgan, announced its first-ever job cuts, slashing 10% of its workforce. Subsequently, Coinbase, which planned to triple its workforce, revealed it had to slow down hiring. It followed this decision by freezing all new hiring while pulling some accepted job offers.
Furthermore, companies like BlockFi, crypto.com, and several Latin American exchanges all laid-off members of staff. These firms all highlighted the dramatic pullback in prices of equities and crypto as the reason for their action. They also maintained the need to remain profitable was at the fore of their decisions.
However, not all companies have been adversely affected by the downturn in the crypto market. Despite the slew of sacking and layoffs, other companies, including Binance, have doubled down on hiring. FTX also announced an expansion into equities to diversify its business leading to more hirings.
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Binance Plans to Leverage the Market Slump
While continuing its hiring spree, Binance will take advantage of the market downturn by conducting several acquisitions. The company’s stance was reiterated by its CEO, Changpeg Zhao, at the recently Consensus 2022 conference. He revealed his belief that the crypto winter was a great time to increase investment in talent and acquisitions. He said,
“We have a very healthy war chest. We, in fact, are expanding hiring right now. [Binance is also] kicking into high gear in terms of M&A activity. During bull markets, everyone’s starting their own projects, everyone’s paying everyone ridiculous compensation. Now the market is more balanced. If we are in a crypto winter, we will leverage that. We will use that to the max.”
Furthermore, CZ highlighted that his company had been frugal and avoided expensive promotional spending like Superbowl ads or acquiring naming rights to sports venues. His statement directly references competing exchanges that have recently received naming rights to sports arenas, including crypto.com and FTX.
Consequently, Binance is trying to boost its investment in other companies, following initiatives like its $200 million investment in Forbes. This, CZ describes as a strategic move to help propel blockchain adoption into new areas while also more user education in the future.
Meanwhile, the crypto market saw further downside yesterday, with the total market capitalization of the industry slipping below $1 trillion. Bitcoin’s price crumbled more than 10% amidst a significant selloff, touching $22,600, its lowest value since December 2020.
Furthermore, several popular cryptocurrencies, including Ethereum, Cardano, Solana, and Dogecoin, suffered even more significant losses than Bitcoin. According to Coinmarketcap, most of the losses incurred by these altcoins range between 15% to 25% in just 24 hours.
Do you think Binance would be able to sustain its hiring while the market continues to slump? Let us know your thoughts in the comments below.