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A darker image of crypto is taking shape, one in which some firms cut employment due to declining interest in once-hot assets, despite Bitcoin's surpassing another all-time high and increased ETF inflows.
Kraken, a cryptocurrency exchange, announced layoffs last Wednesday, affecting an estimated 15% of its workforce, while Coinbase, a competitor, revealed results that fell short of expectations.
Consensys, a software company behind the popular Ethereum wallet MetaMask, is one of several digital asset companies that has just begun cutting workers.
The business is hopeful that crypto convert Donald Trump will soon be back in the White House, and Bitcoin has been strong recently.
So, these job cuts seem counterintuitive.
Meanwhile, several blockchains that were supposed to be Bitcoin replacements have failed, and crypto firms reportedly raised far less money in the September quarter.
The real reason is that the crypto industry, beyond a few top tokens, has failed to take off and is still licking its wounds from the regulatory fallout over the last few years.
The anxiety comes from the question - what next?
The industry's split is shown by comparing the main cryptocurrencies' performance this year.
Compared to where it was on January 1st, Bitcoin is up around 70%, and Solana is up about the same.
Elon Musk is a Trump supporter and the wealthiest man in the world; his memecoin, Dogecoin, has surged about 90%.
However, so-called alternative cryptocurrencies, such as Polkadot, Polygon, and Algorand, have suffered.
While the adoption of Bitcoin among institutional investors has clearly widened since the ETF approval, the lack of interest in other digital assets is questioning the rally.
According to venture capital investment firm Galaxy, investment in crypto startups fell 20% from the previous quarter, reaching $2.4 billion.
Venture capital agreements have not returned to their pre-crypto winter levels, indicating that trust has not yet fully recovered from the subsequent crash.
So, it is clear that interest in broader digital assets is still lacking.
Non-fungible tokens, NFTs, and blockchain-based games are two crypto fields that have never fully recovered from the industry-ravaging catastrophe two years ago following the FTX crash.
Crypto exchanges, which include hundreds of tokens, both large and small, are a reliable indicator of the industry's overall health.
The stock of Coinbase, the largest US platform, fell as much as 15 per cent last week after the company failed to meet September quarter sales and profit targets.
Kraken claimed in a blog post that it is making "organisational discipline decisions" to remove unnecessary management layers and slash jobs. A new chief financial officer was appointed, while the company's chief technology officer and chief product officer departed.
Another major reason for the weaker investment in the broader digital assets industry is the lack of clarity in US regulations. Consensys is among several companies that say unclear US rules are to blame for their troubles.
If elected, Trump has pledged to remove Securities and Exchange Commission (SEC) Chairman Gary Gensler from his position, rallying significant segments of these businesses against what they perceive as an antagonistic attitude from the US SEC.
This puts the election results at the forefront of the crypto industry.