Australian crypto exchange Swyftx laid off 35 percent of employees as the crisis sparked by FTX’s implosion further dims the sector’s outlook.
The firm let go 90 of 259 people, a step taken “in expectation of a potentially sharp fall in global trade volumes in the first half of 2023 and further aftershocks from FTX’s collapse,” a Swyftx spokesperson said yesterday.
CEO Alex Harper flagged the potential for more “black swan-type events” in a message to staff seen by Bloomberg News.
Photo: Bloomberg
Swyftx had already laid off about one-fifth of its workforce in August.
Investors have fled the crypto sector after a yearlong rout and a series of blowups, most recently the wipeout of Sam Bankman-Fried’s FTX crypto empire. Platforms around the world such as Crypto.com, Kraken and Bybit have cut staffing levels in response to the downturn.
Speculators cleaving to the view that the crypto rout is mostly over are at risk of a rude awakening next year, Standard Chartered PLC said.
A further bitcoin plunge of about 70 percent to US$5,000 next year is among the “surprise” scenarios that markets might be “under-pricing,” the bank’s global head of research Eric Robertsen wrote in a note on Sunday.
Demand could switch from bitcoin as a digital version of gold to the real thing, spurring a 30 percent rally in the yellow metal, Robertsen said.
This possible outcome involves a reversal in interest-rate hikes as economies struggle and more crypto “bankruptcies and a collapse in investor confidence in digital assets,” he said.
Robertsen added that he was not making predictions, but instead adumbrating scenarios that are materially outside of current market consensus.
The question of just what lies ahead for digital assets has arguably never been harder to answer following the collapse of Sam Bankman-Fried’s FTX exchange and sister trading house Alameda Research.
The tremors spreading from the blowup threaten to topple more crypto companies and buffet token prices.
For some, much of the bad news might already be reflected in a more than 60 percent plunge in bitcoin and a gauge of the top 100 tokens over the past year.
“Our base case is that most forced selling is over, but investors might not be compensated for the market risk incurred in the immediate term,” Sean Farrell, head of digital asset strategy at Fundstrat, wrote in a note on Friday.
Farrell pointed to ongoing uncertainty surrounding Digital Currency Group, parent company of embattled crypto brokerage Genesis.
Creditors to Genesis are seeking options to try to keep the brokerage from falling into bankruptcy.
The crypto sector continues to retrench. For example, digital-asset exchange Bybit is planning to cut its workforce by 30 percent.
More pain might lie ahead: About 94 percent of respondents to Bloomberg’s MLIV Pulse survey think that further blowups would follow the bankruptcy of FTX, as years of easy credit give way to a tougher business and market environment.
Bitcoin for the moment is fairly steady. The largest virtual coin rose as much as 1.8 percent yesterday and was trading at a three-week high of about US$17,340 as of 2:35pm in Tokyo.
Tokens such as ether, solana and polkadot also gained.
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