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Coinbase Lays Off 20% Of Workforce As Crypto Crisis Worsens

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J.D. DURKIN: Coinbase  (COIN) - Get Free Report announcing plans here, Martin, to 20% of its workforce, marking the second round of job cuts for that company alone. What do we know with regards to the details?

MARTIN BACCARDAX: Yeah, about 950 jobs are likely to go, J.D., that's the anticipation. They're going to have to book a charge of about 160 million to pay for the seventh and all the rest of it. But the larger concern, of course, is what this means for Coinbase with regards to its position in the broader crypto space, where it's seeing that space going this year and indeed beyond what it might have to say about projects that they had planned. Now, the company hasn't said too much about that, only that they really have to react to market conditions right now.

But this is their third round of layoffs within the last 12 months. And this is a shrinking business. And I think this is going to be one that is going to find it difficult to recover from. And it certainly won't be anything compared to what we witnessed in the latter part of 2020 and for the most of 2021. Last year, crypto gave back about a trillion dollars in market value. And this is not a binary situation where somebody wins and somebody loses. A lot of this was just completely evaporated. 

And consumers, particularly retail investors, have taken a big hit along the way. Venture capital investment in the crypto space has fallen off a cliff as well. It's down about 75% from 2021 levels. So people aren't building out new projects. Coinbase is pulling back. Volumes have fallen through the floor. And this is really something I think that is going to characterize the crypto space for much of this year and perhaps even beyond.

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