Coinbase, a major US-based cryptocurrency exchange, has shut down its Chicago office and laid off 30 engineers, while scaling back development of their high-frequency trading matching engine.
This move comes less than a year after opening the Chicago office and establishing plans to delve into high-frequency trading products.
Why Is Coinbase Abandoning Plans and Closing Offices?
As reported by Fortune on April 23, a Coinbase spokesperson spoke to the news publication and described the closing of their Chicago office as a setback.
However, the company is adding employees in other areas of their business, relocating some of the Chicago employees to their San Francisco office and allowing others to work remotely.
Adding to this, the spokesperson said that high-frequency trading is no longer a priority, and that the company is focusing on other new products. While they didn’t specify which products, Coinbase launched 2 new products last year, a custody service and over-the-counter (OTC) trading.
Moreover, Coinbase’s layoffs and Chicago office closure can likely be attributed to the prolonged 2018 bear market, which cut into Coinbase’s revenues. As reported by Reuters, Coinbase revenue was around $520 million, which is 60% less than some analysts expected.
Also, during the 2018 bear market, Coinbase tripled its employee headcount to around 800 people despite the continuous slump in cryptocurrency prices and decrease in revenue.
Though Coinbase has been undergoing layoffs and office closures, and have had multiple Coinbase executives leave the company, the popular cryptocurrency exchange continues to release innovative new products and features.
For instance, the exchange recently launched Visa-powered crypto debit cards for their UK-based customer base, as well as a crypto staking service for Tezos (XTZ) and MakerDAO (MKR), allowing Coinbase custody clients to earn passive income.
All in all, Coinbase is an innovative company that has done a lot for the cryptocurrency industry. They are likely to succeed and develop new products that move the industry forward going into the future.
What new products do you think Coinbase is working on behind the scenes? Will the company regain its reputation and succeed in 2019? Let us know what you think in the comment section below.