No Christmas Baskets for Crypto Users as Exchanges Count Losses

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Cryptocurrency companies are slashing Christmas gift budgets as industry headwinds continue to dampen the performance of major cryptocurrencies.

Cryptocurrency companies are slashing Christmas gift budgets as industry headwinds continue to dampen the performance of major cryptocurrencies.

The price of bitcoin, the world’s most valuable cryptocurrency, traded at $16,838 on December 25 according to data from Coinmarketcap, a level it has remained since November 12, 2022.

The last time bitcoin broke above the $16,000 level was on January 8, 2018, according to data from CoinDesk. Bitcoin closed December 2021 at $47,192.17.

For crypto exchanges such as Binance, Quidax, Bundle and Luno present in the Nigerian market, this means lost profits as more and more users continue to withdraw their assets for security reasons.

Osaretin Victor Asemota, Growth Partner at Alta Global Ventures African partner AnD Ventures, said he lost all his assets in the FTX crash. The collapse of FTX triggered the biggest crypto-related bankruptcy of all time and affected investor confidence in the market even more than the global economic downturn that led to a sell-off on global exchanges.

“I completely shut down. Crypto is no longer worth my time. I left speculation,” Asemota said.

Damodar, a robotics engineer, said the fundamental flaw in crypto is valuation.

“It’s easily summed up as a warehouse, an empty warehouse. The goods are the reason for the warehouse, so the goods have a higher value. The warehouse was crypto, but they were valued like commodities, money,” he said. “If it was viewed basically as what it was, a ‘database’ solution, and compared to existing solutions, you’d find it sits somewhere in the middle of ideas that already exist. But there are things out there that will change our world today, and they are incredibly vast.

In an effort to avoid going under, a few crypto exchanges have enacted mass layoffs. Quidax laid off 20% of its staff of just over 100 people in November. Earlier in the year, the company also cut salaries for employees by 30% and 50% for team leaders on the understanding that the cut would only last for 3 months, according to a TechCabal report.

Nestcoin, another Lagos-based crypto exchange, laid off staff because $4 million of its operating capital was deposited with FTX.

Lazerpay, a crypto payment processing company launched in February, was also caught in the middle of FTX’s collapse that led to layoffs.

Binance and Luno are silent on any plans to lay off staff; nor do they plan to recruit in the coming months. Users who usually receive Christmas baskets each year from the two companies said nothing had arrived in the mail regarding the gifts.

As exchanges counted their losses, many crypto industry founders and billionaires were also left in the debris of the market road.

Forbes estimates that 17 of the richest crypto investors and founders have collectively lost around $116 billion in personal wealth since March. Fifteen of them have lost more than half of their fortune in the past nine months. Ten have completely lost their billionaire status.

But some traders are still hoping the market will reverse the trend in the coming year. Part of that confidence stems from a decision by Nigerian lawmakers to enact a law that technically legalizes crypto trading in the country.

The Investments and Securities (Amendment) Bill 2007, once passed and signed into law, will allow the Securities and Exchange Commission to recognize cryptocurrency and other digital funds as investment capital. The bill will also define the regulatory roles of the Central Bank of Nigeria (CBN) and the SEC regarding digital currency.

Crypto trading remains restricted in Nigeria following a CBN order prohibiting financial service providers from transacting with crypto and crypto-related businesses and individuals. The order also prohibits these companies from holding an account with financial service providers.

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