Coinbase slows down the setting because the cold on the cryptoma markets hits the stock exchange
Coinbase slows down the setting because the cold on the cryptoma markets hits the stock exchange
Coinbase slows down its attitude plans in view of the latest signs that a strong decline in trading in digital brands such as Bitcoin demands a high tribute of one of the largest crypto exchanges in the world.
The US group made the announcement in a letter to the employees who was published on Tuesday in a submission to Securities and Exchange Commission after expecting net loss of 430 million in the results of the first quarter of last week.
It marks a drastic change of strategy for Coinbase, which had planned another aggressive rush in the second year in a row.
In February, the company listed on the US exchange gave detailed plans for the hiring of 2,000 employees in the areas of product, technology and design, which would continue to increase the employee base, which had grown to 3,730 employees at the end of last year. A year earlier, the stock exchange had just 1,250 employees.
But crypto dealers were put off this year by severe losses in value for digital assets. The spot trade with digital tokens on Coinbase in April amounted to around $ 72 billion compared to an average of $ 118 billion in the previous 12 months, according to the cryptocome data compiled by The Block Crypto.
The cooling comes because the entire circulation on the cryptom market has dropped by more than 40 percent to $ 1.4 trillion this year. Bitcoin, the most popular cryptocurrency in the world, has recently fallen under $ 30,000 for the first time since July 2021.
Emilie Choi, President and Chief Operating Officer from Coinbase said in the letter to the employees that the decision to slow down the group's growth pace was made to achieve the financial goals that they had given the investors for their second quarter In view of the current market conditions, we think it is advisable to stop the hiring more slowly and to re -evaluate our personnel requirements compared to our priority business objectives, "wrote Choi.
The unveiling of Coinbase last week that fewer trades were made on its marketplace than in the previous quarter, investors' trust has been severely shaken. The company's shares lost about three quarters of their value this year, but news about the slowdown of the number of attitudes increased the shares in pre-exchanging trading on Tuesday by about 6 percent to around $ 65. This remains significantly below the opening price of $ 381 with its direct listing last April.
"We know that this is a confusing time and that market swings can feel scary," added Choi. "But as we said in the town hall last week, we are planning for all market scenarios, and now we start to put some of these plans into practice." She found that this was not the first market depletion that the stock exchange had experienced.
investors are also afraid of disclosing Coinbase that the money of the customer could be at risk if the company goes bankrupt. The funds would not be earmarked and secure - as with a bank - but could flow in the general funds for all unsecured creditors, the company said in an application for admission.
The company said that the disclosure was part of new requirements of the US supervisory authorities. "We have no bank risk. Your funds are safe at Coinbase, as they have always been," wrote Chief Executive Brian Armstrong on Twitter.
David trainer, managing director of the investment research company New Constructs, recently told the Financial Times that the crypto exchange had to clear investors. "This public recognition could trigger fear among the company's customers. We are not sure whether this share is worth more than the cash in your books or $ 33 per share," he added
Source: Financial Times
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