Gemini Cuts 10% of Its Staff, Coinbase Announces Cost Cuts. What Does This Mean?

Gemini and Coinbase are both making major cuts to their budgets. Has crypto crumbled?

Many investors are worried due to the recent announcements by both Gemini and Coinbase, two of the most popular digital currency exchanges, as they announce plans to cut down on new projects and halt hiring. Gemini has released its plans to cut 10% of its staff in order to scale back during this difficult time for cryptocurrency, while Coinbase is rethinking the acceptance of offers for new endeavors in an effort to do the same. What does this mean for the two companies going forward?

Gemini's staff is shrinking

As crypto prices stay in a slump, Gemini, one of the world's top cryptocurrency apps, has announced plans to cut 10% of its staff and focus only on projects that are essential to its mission and vision. It is unclear exactly how many employees will be laid off, as Gemini does not disclose the exact number of employees under its care, but some have estimated that at least 100 workers will be affected by the cuts. In a memo sent to Gemini employees by the Winklevoss brothers, the business' leaders cited "turbulent market conditions that are likely to persist for some time" as the cause for the cuts. Gemini is not alone in its need for scalability.

Coinbase's cuts

Similar to Gemini, Coinbase has stated that the current market conditions are causing it to extend its hold on new hires. Coinbase will also be rescinding "a number of accepted offers,” stopping these projects from getting off the ground before they have begun. While these cutbacks might be concerning for some, this does not mean Coinbase will go under. In fact, Coinbase has indicated that these changes are happening in an effort for the company to persist and grow stronger over the long term. One thing seems certain among many cryptocurrency executives: the market is not likely to recover in an instant.

The bottom line

Gemini and Coinbase are both cutting back their teams and reducing their spending to become stronger and healthier businesses in the long term. While this may be concerning for many investors, this news alone does not mean these two organizations are failing. It simply means they are scaling back their spending to wait out the "crypto winter" as executives have characterized it. This kind of winter is a cyclical thing, and in time, values are likely to rise again. With prices forecasted to stay down for a while, now might be the right time to buy crypto and start hodling it. Once prices go back up, it may be some time before they come down again.

With the volatility of the crypto market, are you wondering if crypto is right for you? If so, check out our guide where we answer the question: Is crypto worth it?