Due to the Crackdown in China, Huobi Global May Reduce its Workforce by More Than 30%
- Huobi Global could lay off over 30% of its workforce. Situated in Seychelles, Huobi is one of the most well-known cryptocurrency exchanges, with a daily trading volume that often exceeds $1.2 billion.
- Due to the current market slump, competitor exchange Bybit took a similar cost-cutting step last week and let off 30% of its personnel.
- This came after Coinbase (COIN) decided to lay off more than 1,100 workers. 400 workers were also let go by Crypto.com, BlockFi, and other companies.
Huobi Global, one of the world’s largest cryptocurrency exchanges, could be forced to lay off over 30% of its workforce due to the Chinese government’s crackdown on cryptocurrency trading.
Founded in 2013, Huobi quickly rose to become one of the industry’s most popular and well-respected exchanges, serving millions of customers from all over the world. However, China’s decision to ban crypto trading last year dealt a heavy blow to the company, leading to a sharp drop in revenue.
Now, with its operating costs far exceeding its income, Huobi is facing some tough decisions. The company has already announced plans to close down several of its overseas offices, and it looks like more job cuts could be on the horizon.
While this is undoubtedly a difficult time for Huobi and its employees, it’s important to remember that the company has weathered many challenges before and always comes out stronger in the end. With strong leadership and a commitment to innovation, there’s no doubt that Huobi will find a way to navigate these troubled waters.
Why is Huobi Global Cutting Down Staff?
The decline in cryptocurrency prices can be attributed to a variety of factors. The most significant factor is the increased regulation of cryptocurrencies by governments around the world. In December, China crackdown on cryptocurrency exchanges and ICOs, which contributed to the market sell-off. Additionally, South Korea has also implemented new regulations on cryptocurrency trading. These actions by government authorities have made it more difficult for investors to trade cryptocurrencies, leading to a decrease in demand and prices.
Another factor that has led to the decline in cryptocurrency prices is the development of alternative investment products such as futures contracts. Futures contracts are derivatives that allow investors to bet on the future price of an asset without actually owning the asset itself. The launch of bitcoin futures by CME Group in December was seen as a legitimization of cryptocurrencies by institutional investors. However, many retail investors were caught off guard when prices began to decline soon after launch, as they were forced to liquidate their positions at a loss.
Lastly, there has been growing skepticism about the long-term viability of cryptocurrencies as an investment due to their volatile nature. Cryptocurrencies are not backed by any physical assets or governmental guarantee, making them susceptible to large price swings. This volatility has deterred some investors from putting their money into cryptocurrencies, opting for more stable investments such as stocks or bonds.