The crypto space has been going through a rough patch since the year’s second quarter. As a result, more companies than healthy have filed for bankruptcy, taking many jobs with them. Still, while people have settled into the new normalcy of the downtime the crypto space is currently facing, the collapse of FTX is bound to trigger a more immense aftermath than is expected, and there are a few reasons why this could be the case.
FTX was known as one of the biggest and seemingly untouchable crypto companies. It was able to garner the trust of crypto enthusiasts and the confidence of companies who, due to how structured and reliable it seemed, put their funds into FTX.
FTX was seemingly okay with their CEO coming to reassure investors that the company would not be filing for bankruptcy. Still, the news quickly took a turnaround when by Friday last week, the company did indeed file for bankruptcy. Binance was also reported to be about to buy out FTX but pulled out when the company saw the state FTX was at, seemingly beyond it being of much worth to Binance.
FTX exchange’s downfall, unfortunately, dragged down not only the prices of specific cryptocurrencies but also other companies who had relied on it to save them from the market’s collapse.
Companies Having Funds In FTX
One of the primary triggers for layoffs due to the collapse of FTX would be that the bankruptcy of the company took with it the funds of several companies that had investments saved in FTX and in a bid to lessen the load and burden that’ll come with paying the salary of employees and finding a way to fill back their investments that have gone with FTX, companies would opt for the option of laying off workers.
FTX exchange for most of the short Crypto downtime had cosplayed as a knight saving the damsel in the form of the crypto space. Companies like Celsius, Voyager, and even BlockFi had trusted the CEO and FTX to protect them. Still, after the company started showing holes in their balance sheets, it was clear that FTX was not saving anyone, not even them, and along with their downfall came the collapse of other crypto companies.
FTX may have seemed too secure to file for bankruptcy or go this low, but with all the crypto space has faced this year and with all the holes in the company that has now become evident, it may have been a long time coming. FTX and its associated companies had no choice but to all file for bankruptcy last week, the news let the crypto space reel, and cryptocurrencies saw a significant drop, with USDT even de-pegging by 4%.
Companies May Opt Out Of The Crypto Space
The fear of getting into a more risky space is not native only to individuals in the crypto space and companies. Seeing a company like FTX exchange go down this way may shock other smaller companies to their core and push them to pull out of the crypto space, and this will trigger another wave of layoffs.
The coming months will put the crypto ecosystem to the test and leave many without a job, more companies will pack up, thousands may be out of employment, and the light in the tunnel seems dim until crypto goes this massive downtime.
FTX exchange is also one of many companies that have filed for bankruptcy in the last few months. Employees have been laid off from crypto exchanges and other crypto-related companies, like news outlets or content creation outlets that revolve around crypto. The downfall of FTX seems like the opening for another big layoff season.
The Many Downtimes Plaguing The Crypto Space
The crypto space has weathered too many storms these past three quarters, from the crash in crypto prices to the many hacks that have plagued areas to the collapse of companies with investments in them, and now FTX, a lot of companies may be on their last leg.
The downtimes have been at a constant state, and while crypto is generally known to be volatile, the hits have become scarier and have seen thousands pulling out after losing their net worths.
The crypto space may bounce back, but many would have lost jobs and money.
Conclusion
The Crypto Ecosystem will surely be back to its healthy state, but for FTX, the future could look better. Before the crypto market regains its former shape, there may be more casualties in place of employee layoffs.
