Despite several hundred of million dollars raised by the crypto investment management and trading firm NYDIG for its institutional Bitcoin (BTC) fund, the firm has announced that it is letting go of 33% of its employees. Based on information rounded up from people familiar with the matter, the layoff is already ongoing and has been on for some weeks.
“It’s like a trading desk mentality where nobody talks to anyone. You can disappear and nobody will know for months,” one former NYDIG employee commented
So far, the firm’s employees who are estimated to be around 286 according to NYDIG’s LinkedIn profile, have been laid off to as many as 110 staff citing high costs. This is a clear indication that the crypto winter has had adverse effects on many established firms in the ecosystem.
The news of NYDIG’s retrenchment exercise comes only a few days after Robert Gutmann, and Yan Zhao stepped down as existing Chief Executive Officer and President respectively. They were immediately replaced by two company leaders who were promoted, former global head of institutional finance Tejas Shah as CEO and former global head of payments Nate Conrad as President of NYDIG.
Both Gutmann and Zhao continue to work for NYDIG’s parent company Stone Ridge Holdings Group.
NYDIG Invests in Banking Strategy
Only last year, the firm raised $1 billion in funding to build an institutional-grade bitcoin platform with a valuation of $7 billion. NYDIG introduced the ‘Bitcoin for all’ campaign with this fund where banks and credit unions alongside NYDIG collaborate to offer unprecedented BTC access to large groups of retail banking customers.
When least expected, the crypto market went into a blood bath that has left many firms insolvent, bankrupt, and almost short-staffed. Especially, with the collapse of the TerraUSD/LUNA which wiped off almost $2 trillion from the crypto ecosystem.
In addition, the dip of the BTC cryptocurrency from its all-time high of $68,000 in November 2021 down to $19,190 at the time of this writing, has had its effect.
“NYDIG put all their eggs in this banking strategy, but they realized that there was no way that these banks were ready,” the former employee told CoinDesk. “They blew through all this money telling a story that they would bring bitcoin to the masses. Their core strategy was blundered.”