The commerce department announced this week that the US economy shrank 4.8% in the first three months of the year, the steepest decline since the last recession. The same is the case for Europe that covers 19 countries, its economy shrank by 3.8% in Q1 of 2020, the biggest fall since 1995 when eurozone statistics first began.
Meanwhile, another 3.8 million people lost their jobs in the US last week but the pace of layoffs is slowing. Overall, an unprecedented 30 million Americans filed for unemployment benefits in the six weeks.
The US unemployment is on course to reach the levels unseen since the Great Depression as with a backlog of claims, these figures are undercounting the number of people out of work.
In March, the jobless rate rose to 4.4%. JP Morgan predicted that unemployment could reach 20%.
Exchanges focused on expansion
In the crypto market, however, crypto exchanges are on a hiring spree. Kraken that was planning to hire 250 staffers, will be recruiting 350.
Binance recently shared that its staff has grown to over 1,000 expand its workforce 25% in the first quarter. They are hiring for more people to support its recently launched mining operation, Binance Pool.
Coinbase has posted dozens of openings while crypto exchange OKEx plans to hire more staff in May to expand its workforce of over 1000 employees.
“There’s a greater awareness of crypto as an asset class among the general public,” said Nic Carter, co-founder of Coin Metrics about this trend that just added five full-time employees as well.
But the crypto sector has had its share of exodus too with ConsenSys cutting workers. Crypto-carrers.com also saw a decline in new positions, from 300 last year to 84 in April this year.
This could be because exchanges, which make the bulk of its money from trading fees, are benefiting immensely from the heightened volatility in not April but also from the March crash.
Halving in Effect
With halving less than 12 days away now, the speculation in the market is particularly heightened as we saw spot exchanges leading the current rally.
During the last two halvings as well, the bitcoin price exploded. In the wake of the 2012 halving, BTC price jumped from $12 to $1,000 and following the 2016 halving, the price had a 1,000% spike.
So, this workforce expansion could be crypto exchanges anticipating a flood of speculators and investors who don’t wanna miss out on the halving. Lex Sokolin of ConsenSys told Bloomberg,
“It is really nuts to me that there’s such speculation, since everyone already knows it is going to happen, and should be pricing it in as past information.”
“What we can learn is that the crypto markets are still irrational and short-term oriented, and that companies are betting on the speculation of others to drive their own staffing decisions.”
For now, Bitcoin’s price is trading just under $9,000 preparing for the miner inflow to be cut down in half.