Winklevoss’ Gemini lays off 10% of staff as crypto winter” sets in

Gemini, the digital asset exchange owned by the billionaire Winklevoss twins, plans to lay off about a tenth of its workforce, the latest sign of how the sharp decline in crypto markets has disrupted the industry's rapid growth.

Thursday's announcement comes as the value of the digital asset market has fallen by around $2 trillion to $1.3 trillion since peaking in November 2021, according to the Financial Times.

“Here we are now, in the contraction phase transitioning to a phase of stagnation – what our industry calls ‘crypto winter,’” Cameron and Tyler Winklevoss said in a note to employees, first reported by Bloomberg.

Bitcoin has fallen more than 50 percent since its November high, while other smaller coins have suffered much steeper losses. At the same time, last month's crash of the once-popular Luna and Terra tokens has shaken traders' confidence in crypto lending programs like "staking" that had provided lucrative returns.

Crypto traders tend to bet more actively on the market when it is rising, analysts and exchange managers have said. Given the breadth and severity of the bear market, crypto trading volumes have plummeted.

According to data from The Block Crypto, spot trading volume on leading exchanges averaged about $750 billion per month this year, compared to $1.2 trillion in 2021. Lower volumes reduce the fees exchanges earn from facilitating transactions.

The Winklevoss brothers said in their note to employees that the problems facing the crypto market “have been further exacerbated by the current macroeconomic and geopolitical turmoil.”

The crypto industry boomed as central banks and governments poured liquidity into the global economy and people around the world were stuck at home during lockdowns. However, investors have run away from speculative assets this year, with shares of unprofitable technology companies and other risky bets also coming under intense pressure as global central banks act to combat inflation.

Some investors are betting that the crypto downturn will be temporary and that innovations like blockchain digital ledger technology will reshape finance. Venture capital firm Andreessen Horowitz launched a $4.5 billion cryptocurrency fund earlier this month as it said the crypto industry is entering a new "golden era" in which "new talent, viable infrastructure and community knowledge" would drive rapid innovation.

Echoing this sentiment, the Winklevoss brothers told employees that the “crypto revolution is well underway” and that “its impact will continue to be profound.” However, they also noted that the gloom that has descended on the crypto market is unlikely to change any time soon.

“We asked team leaders to ensure they only focus on products that are critical to our mission and to assess whether their teams are right-sized for the current, turbulent market conditions that are likely to continue for some time,” they said.