What happened

One of the hardest-hit large-cap cryptocurrencies in 2022, Cronos (CRO -0.65%), has been making some very positive moves to kick off this new year. Today's 24-hour surge of 8.7% as of 12 p.m. ET has been the latest in a string of rallies to start 2023. On a year-to-date basis, CRO is now up an impressive 44%, outpacing the broader market by a wide margin.

Much of this move appears to be tied to workforce reductions that the company announced last week. Cronos is the native blockchain of Crypto.com, a centralized crypto exchange that has seen significant scrutiny following the collapse of FTX and other centralized players last year. One executive hopes this significant layoff -- of 20% of the company's workforce -- will allow Crypto.com to traverse the "confluence of negative economic developments" currently plaguing the sector.

So what

Cost-cutting is great, and in many respects, this should be bullish for Crypto.com's transaction-oriented exchange business. Because CRO is the native token of the Crypto.com exchange, a significant portion of Cronos' value is undoubtedly tied to the success of its parent exchange. Accordingly, with volumes down, reining in costs might be the only strategy available to the crypto exchange right now.

Additionally, with the crypto market appearing to be in a recovery stage (or at least seeing a nice bounce off last year's bottom), centralized crypto exchanges might be in vogue as a high-beta way to play this rally. Thus, for investors positioning themselves for a near-term recovery, betting on CRO has clearly paid off over the past two weeks.

Now what

Now, the question is whether this rally can continue for the foreseeable future. Thus far, 2023 has been a very good year for risk-on trades. Whether in crypto or highly speculative stocks, investors have been compensated for taking risk. We really didn't see much of this last year outside of a few short rallies.

But this two-week move in CRO might be short-lived. An assortment of macro catalysts could be responsible for a reversion lower, meaning the risk to the downside appears to be largely out of investors' control.

That said, for traders looking for short-term opportunities, there's a reason Cronos is atop the list right now. I'm not sure this momentum-driven rally will continue, but it's sure fun to watch from the sidelines.