OpenSea CEO Devin Finzer announced Thursday that the company, one of the largest NFT marketplaces, will lay off 20% of its staff as crypto stock dropped substantially over the past six months.
“The reality is that we have entered an unprecedented combination of crypto winter and broad macroeconomic instability, and we need to prepare the company for the possibility of a prolonged downturn,” Finzer said in an internal message shared with the company that he also posted on Twitter.
In addition to OpenSea, other crypto companies also have laid off employees. Coinbase Global Inc., which operates a cryptocurrency exchange platform, announced in mid-June they would cut 18% of their staff due to the economic downtown.
Although Bitcoin and Ethereum stocks have increased slightly over the past two days, overall the two cryptocurrency values have dropped by approximately 70% since their November high.
NFTs, or non-fungible tokens, mean unique digital assets, and they have plummeted in popularity along with cryptocurrencies. NFT sales fell by around 75% from May to June, according to data from OpenSea.
The current crypto collapse comes as a result of macroeconomic factors. The U.S. Federal Reserve has been raising interest rates to counter inflation, leading to more expensive loans and fewer investments in risky assets.
Should I buy crypto now while prices are down?
Some experts say now could be a good time to purchase crypto because the prices are low, although you should be ready for long-term investments and understand the risks behind cryptocurrencies and NFTs.
Compared to savings accounts and treasury bills, crypto investments are risky in part because this is a new technology, and values could fluctuate immensely within days, or even hours.
Before putting money into crypto, experts advise you to prioritize other financial investments, such as retirement funds and emergency accounts.