How Blockchain.com Responds to the Bear Market
As the bear bites hard, blockchain and cryptocurrency exchange company Blockchain.com has unfortunately had to take some difficult measures. The first quarter of 2023 saw layoffs at the firm as it sought ways to cut costs during this challenging time.
In addition to laying off employees, it was also revealed that Blockchain.com would be suspending its wealth management arm. This decision came after careful consideration by senior management who found it made financial sense given current market conditions where trading volumes are falling and interest rates are low.
Blockchain.com’s 11-month-old asset management arm was suspended by the firm, according to a Bloomberg report. The asset arm was launched by the crypto finance company for about a year and cites the extended crypto winter as the reason for the decision to cease operations, marking it as the latest casualty of the crypto winter.
After a funding round that pressured the valuation, Blockchain.com moved to create the subsidiary in April 2022 in London as Blockchain.com Asset Management, in partnership with Altis Partners. Altis Partner was to manage its portfolio using Blockchain.com technology while Standard Custody & Trust Company was appointed as custodian partner.
The subsidiary offered “regulated crypto investment products for institutional investors, family offices and high net worth individuals”. Before it was suspended, a Blockchain.com spokesperson revealed that the asset management arm operation will be put on pause.
In January, the company laid off 28% of its workforce, a total of around 110 employees. However, the redundancies followed the hit to the company from a loan agreement with the now bankrupt Three arrows capital. Blockchain.com now has a staff of 280, up from 160 employees at the start of 2021. All affected employees were assured of receiving severance packages according to country.
It was also rumored in February that the company is likely to sell some of its assets to other crypto firms, but a Blockchain.com spokesperson denied the rumor.
More so, in the midst of crypto winter, Blockchain.com has seen notable landmarks such as registering in some countries, reaching a custody agreement with Anchorage Bank, and partnering with Visa late last year to issue a crypto card in the United States. But these advances were not enough to withstand the impact of the market, and thus the need to suspend the asset management arm.
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