Yesterday, Coinbase issued a statement that it is extending its current hiring freeze indefinitely, noting that it has also rescinded an undisclosed number of job offers to individuals who had not yet started working for the company. The largest cryptocurrency exchange in the United States also noted in the announcement that it will not backfill roles that are currently open unless they deal with security and compliance.
“Two weeks ago, we paused hiring while we took time to reprioritize our hiring needs against our highest-priority business goals. As these discussions have evolved, it’s become evident that we need to take more stringent measures to slow our headcount growth. Adapting quickly and acting now will help us to successfully navigate this macro environment and emerge even stronger, enabling further healthy growth and innovation,” said Coinbase’s top personnel officer, L.J. Brock in the statement.
What Is Coinbase?
Coinbase is a well-known cryptocurrency exchange that makes it easy to buy, sell, and exchange cryptocurrency. Coinbase makes buying Bitcoin as easy as buying a stock through an online brokerage, but look out for the fees and poor customer service.
2022 – Is it the Downfall Year of Crypto?
So far this year, crypto markets are down more than $600 billion in valuation according to media reports. That loss has hit Coinbase particularly hard since a significant percentage of its revenue comes from transaction fees incurred by traders who buy and sell digital assets on its platform.
Further adding to the pressure for Coinbase are media reports that fewer new investors are using its mobile trading app as downloads for the software are off roughly 55% from the same time period last year. It’s reasonable to blame the highly-publicized crypto meltdown as a primary barrier keeping crypto-curious investors on the sidelines.
Months ago, Coinbase executives recognized the company’s overdependence on trading fees and sought to diversify into the popular and profitable NFT market, with lackluster results thus far. Since launching in April, Coinbase NFT gross sales are less than $1.8 million averaging $42,000 per day with about 4,300 users of that NFT platform, according to Dune Analytics. By comparison, the largest NFT portal — which is OpenSea — averaged $161 million per day in January 2022.
Should You Start Investing In Coinbase?
At the time of writing, Coinbase’s stock price was trading for pennies above $66.00, marking a loss of 11% from yesterday’s closing price of $73.82 according to Yahoo! Finance. In context, Coinbase had a launch listing price of $250 a share when it began trading under the COIN symbol on the NASDAQ stock exchange last April. Within hours, its price per share soared as high as $429.54 before closing its first trading day at $328.28.
This is not financial advice, and investors should always do their own research, investing only amounts they can comfortably afford to lose. While Coin is currently trading at an 84% discount from its peak price, the category is simply too volatile and uncertain for the average individual.