Gemini, the digital asset exchange owned by the Winklevoss billionaire twins, plans to lay off about a tenth of its staff in the latest sign of how the sharp drop in crypto markets has disrupted the industry’s rapid growth.

Thursday’s announcement comes as the market value of digital assets has fallen about $2 billion from its November 2021 peak to $1.3 billion, according to data compiled by the Financial Times.

“This is where we are now, in the contraction phase settling into a period of stasis – what our industry calls ‘crypto winter,'” Cameron and Tyler Winklevoss said in a note to employees, which was first reported by Bloomberg.

Bitcoin has fallen more than 50% from its November high, while other smaller coins have suffered much more severe losses. At the same time, the crash last month of once-popular luna and terra tokens shook traders’ confidence in crypto lending programs such as staking, which had provided lucrative returns.

Crypto traders tend to bet more actively on the market when it is rising, analysts and exchange executives have said. Given the scale and severity of the bear market, crypto trading volumes have fallen sharply.

Spot trading volumes on major exchanges have averaged around $750 billion per month this year, up from $1.2 billion in 2021, according to data from The Block Crypto. Lower volumes reduce the fees exchanges earn by facilitating trades.

The Winklevoss brothers said in their memo to employees that the problems in the crypto market have been “further exacerbated by the current macroeconomic and geopolitical turmoil.”

The crypto industry exploded as central banks and governments injected liquidity into the global economy and people around the world were stuck at home during the continued lockdowns. However, investors have moved away from speculative assets this year, with shares of unprofitable tech companies and other risky bets also coming under heavy pressure as global central banks act to curb inflation.

Some investors are betting that the crypto downturn will be temporary and that innovations such as blockchain digital ledger technology will reshape finance. Venture capital firm Andreessen Horowitz launched a $4.5 billion cryptocurrency fund earlier this month as it said the crypto industry was reaching a new “golden era” in which “new talent, viable infrastructure and community knowledge” would spur rapid innovation.

Echoing that sentiment, the Winklevoss brothers told employees that the “crypto revolution is well underway” and “its impact will continue to be profound.” However, they also noted that the gloom that has gripped the crypto market is not expected to dissipate any time soon.

“We’ve asked team leaders to ensure they’re only focused on our mission-critical products and to assess whether their teams are the right size for the current and turbulent market conditions that are likely to persist. for a while,” they said.

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