NYDIG cuts 33% of full-time jobs as crypto winter bites
Bitcoin infrastructure service provider New York Digital Investment Group (NYDIG) is laying off almost a third of its workforce amid a prolonged collapse in crypto prices, the company confirmed to the Wall Street Journal (WSJ).
Company executives informed employees affected by the job cuts “as part of structural changes” on September 2022, becoming the latest digital asset shop to downsize its headcount amid chilly crypto winter.
The cryptocurrency exchange will cut 33% of full-time jobs, or about 110 jobs, to help weather difficult economic conditions. Employees were told the firm was seeking to trim expenses and narrow its focus to more-promising businesses, the sources said.
“It’s like a trading desk mentality where nobody talks to anyone. You can disappear and nobody will know for months,” a former NYDIG employee told CoinDesk.
NYDIG felt it had to grow rapidly in 2022 to compete across numerous sectors and take advantage of surge crypto prices, but the former employee said the company was apparently “over-hired” even while the market was strong.
“NYDIG put all their eggs in this banking strategy, but they realized that there was no way that these banks were ready. They blew through all this money telling a story that they would bring bitcoin to the masses. Their core strategy was blundered,” he added.
NYDIG builds bitcoin-focused investment and custody products for institutional investors. At the peak of crypto market in late 2021, it was reportedly fast approaching $10 billion in assets under management. The company also teamed up with tops banks like US Bancorp (US Bank), Wells Fargo and JPMorgan to offer bitcoin funds to their high net worth clients.
In December, NYDIG secured $1 billion in a growth capital round that valued the institutional crypto shop at more than $7 billion. The latest funding round brought the sum raised by NYDIG in 2021 to $1.3 billion. This amount was set to help the company advance its Bitcoin-oriented initiatives in various sectors, including asset tokenization and smart contracts.
In addition to these Bitcoin-related business initiatives, NYDIG, which is the cryptocurrency arm of Stone Ridge, is also looking to introduce an ETF product involving Bitcoin. NYDIG already filed Bitcoin ETF registration documents with the US Securities and Exchange Commission.
NYDIG isn’t alone in dealing with the effects of crypto’s collapse. On top of those pieces of news was Coinbase, which cut about 1,100 jobs or 18% of its workforce and Gemini which let 10% of its staff go.
These exchanges join other crypto firms like Crypto.com, BlockFi, Bitso and Mercado Bitcoin in Latin America in slashing hundreds of jobs to ride out a downturn in the crypto sphere.