Bithumb, the largest cryptocurrency exchange in South Korea, showed the door to half its staff. Citing declining revenue in the crypto-winter, the exchange decided to cut its losses, and reduce manpower.
A report detailing the development stated that Bithumb will let go of around 160 employees, out of a total pool of 310, by the end of March. The report further added that the employees have been let go on the basis of “voluntary retirement.”
The exchange’s spokesperson stated,
“Voluntary retirement is part of our support program for former employees and is intended to provide assistance and training for job placement.”
Trading volume on major exchanges has been declining since the crypto-winter began last year. After the market recorded a remarkable high in January 2018, the trading volume slumped again, leading to several exchanges shutting up shop.
Bithumb’s slumping trade volume, coupled with the decreasing number of new investors in the bear market, resulted in plummeting revenue and low profits. With trading down, commissions have declined, leading to the South Korean exchange taking the decision to slash its staff.
The spokesperson added,
“Apart from that, [Bithumb’s] trading volume has decreased compared to the previous year, [so] we are trying to provide internal measures. We will continue to add necessary personnel for various new businesses.”
A January Diar report had analyzed the trading volume of major exchanges in every quarter of 2017 and 2018, and attested the arrival of the crypto winter.
It referenced the example of the American cryptocurrency exchange Coinbase, which saw record high volumes of $46.6 billion and $45.8 billion during the fourth quarter of 2017 and the first quarter of 2018, respectively, when Bitcoin [BTC] almost touched $20,000 and the market cap shot above $800 billion.
When the market turned, Coinbase recorded successive quarterly declines in trading volume. The trading volume dropped by 60.9 percent to $17.9 billion in the second quarter of 2018. The final two quarters saw volumes of $10.4 billion, and $9 billion respectively.
Diar research stated that what Coinbase’s volume did, was not an isolated observation as this “can be said for all major exchanges.” Coinbase’s number of trades also dropped by 61.33 percent, from the first to the fourth quarter of 2018.
Interestingly, Bithumb, following the examples of Coinbase and Bittrex, launched an Over the Counter [OTC] trading with Ortus in February 2019. Through this launch, the South Korean exchange had intended to further its trade volume. However, it did not pan out as the exchange had hoped.
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