Don’t Forget the Hard Crypto Lessons of 2022 – AltFi
New layoffs show that a “spring” is not near for the crypto industry. But when it comes to laying the groundwork for a better market, now is the time.
Image source: Pexels/Anna Tarazevich
It’s hard not to find someone in your family, business or wider network who has lost money – probably they couldn’t afford to lose – by meddling in the crypto markets these last years.
Undoubtedly, others could have made money. Or at least invested with your eyes wide open.
But, there is no doubt that hundreds of thousands, possibly millions, have been hurt by a bull, FOMO-led foray into the crypto markets, with many still unsure how much of their stakes they will recover. , if at all.
However, anyone starting 2023 to make a new investment in Bitcoin sees a very bullish 40% increase in the first month of the year.
Does this show that the prospect of a return to crypto-mania could be on the cards? Let’s hope not and judging from recent events in the industry, companies are still preparing for a tougher business environment.
Last week, sad news broke in the crypto world, with UK-based Luno announcing that it was laying off 35% of its staff.
“2022 has been an incredibly challenging year for the broader tech industry and the crypto market in particular. Unfortunately, Luno has not been immune to this turbulence, which has affected our overall growth and numbers. revenue,” said Mark Swanepoel, CEO and co-founder of Luno.
“This decision will affect some of the smartest, kindest and hardest working people I have ever known who have gone above and beyond to help build our industry, our company and our incredible culture. As you can imagine, it is totally heartbreaking to part with so many incredible people who have contributed so much, and our priority is to handle these departures with the empathy, generosity and gratitude that these Lunauts deserve. he added.
Luno is heavily focused on retail crypto adoption and has substantial marketing costs in its attempt to win business in the form of sponsorship of high-profile music events.
The company says it needs to “readjust” its focus to maintain a “leading position” in its core markets ahead of what it will see as a temporary and cyclical issue.
Luno’s bearish valuation underscores a long period of uncertainty for the crypto.
Not only has this pain for the crypto industry been caused by a severe global economic downturn that has affected investor sentiment towards tech companies more than anywhere else in the market. Additionally, there has been an endless operatic stream of scandal, ruin and destruction of which the collapse of FTX is the best but far from the only example.
Luna, Three Arrows and Genisis show the contagion that sets in during financial crises as well as the underlying “problems” that have existed throughout and only become apparent when the financial tide dies out.
Genesis’ woes prevented many users like Gemini from withdrawing from their portfolios, and the company also lost around 30% of its staff via a mass layoff in January.
Swanepoel notes that these scandals have “an overall cumulative effect” on the crypto industry.
Whether or not this crypto rebound demonstrates a sustainable rally or a “dead cat bounce,” is irrelevant.
Now is the time for regulators, investors and the crypto industry itself to get better and the clock is ticking.
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