Crypto markets across the globe had struggled with layoffs and salary delays last year. Pressure on financial resources with high interest rates and a crunch on investor appetite made organizations struggle in 2023. However, the start of 2024 hasn’t been any different either. Mass layoffs that started in 2023 and have spilled their way into 2024 as well.
Deutsche Bank announces layoffs, follows Citi’s suit
Germany’s Deutsche Bank announced that it is planning to cut 3,500 jobs to reduce costs. Reports suggest that Germany’s largest lender has made headway toward the goal of reducing capital outflow, but it still needs to find €1.6 billion ($1.7 billion) in savings, part of which would come from “simplified workflows and automation.”
Deutsche Bank is the second to plan layoffs this month. Following the same suit, banking giant Citi had also announced that they are going to reduce around 20,000 of their workforce. The layoffs for both banks came after they had posted disappointing earnings for the quarter. Previously, investment banking behemoth BlackRock Inc. also announced that it would lay off 3% of its workers.
Will crypto markets also face the wrath?
Crypto markets have always been sensitive to global trends and investor sentiments. Historically pressure on the financial, technology, and even banking sectors has seen investor sentiments getting damped. A good example of this was when mass tech layoffs in 2023 dealt a major blow to crypto employees.
CoinGape previously reported that 3 out of 4 crypto employees faced pay cuts in 2023. While 60.09% of crypto employees saw a 10% wage reduction, 8.86% got their pay reduced by more than 30%. With increasing layoffs in the banking and financial sectors, cryptocurrency markets will likely have difficulties as well.
2024 outlook: will the market rebound?
Financial markets across the globe have been waiting to pick up pace for the last quarter. Even the crypto sector has seen the fury of waning investor demand and uncertain conditions. One such shocker to the crypto markets was the fall of Silvergate Bank. The crypto-friendly bank collapsed after reporting a loss of $8.1 billion in January of 2023. On March 8, 2023, it was announced that Silvergate Bank would wind down its operations and liquidate.
With looming concerns, investor attention is likely to focus on how sectors are going to perform in 2024. According to research by the Deloitte Center for Financial Services, the financial sector will see revenue models put to the test in 2024. Despite that, the report highlights that banks are generally in a strong position. There will be little organic growth, which will push organizations to look for new revenue streams in a situation when money is tight, the report adds.
As for the crypto markets, the approval of Spot Bitcoin ETFs saw the market rejoice a little. But the hype around the green signal faded soon. However, many factors such as Ethereum ETF approval, Bitcoin Halving, upcoming earnings season, and possible Fed rate cuts could give the market a much-needed bull run.
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