ENGLEWOOD, Colo. — The cryptocurrency market is in ruins. But Taylor and Cameron Winklevoss were interfering.
The billionaire twins, best known for their supporting roles in the Facebook founding, spun and rocked their new cover bandMars Junction, last week at a concert venue outside Denver, the nearest stop coast to coast tour. They sang hits like “Mr.” by The Killers. Brightside” and Journey’s “Don’t Stop Believin'”. Tickets are $25.
The Winklevosses started working part-time as rockers just after their $7 billion company Gemini, which provides a platform for buying and selling digital currencies, laid off 10 percent of its staff. More than $700 billion has been lost in a devastating cryptocurrency crash since early May, throwing investors into financial distress and forcing companies like Gemini to cut costs.
“Constraint is the mother of innovation, hard times are a forced function of concentration,” says Winklevosses, 40 in the notes This month is about layoffs.
Cryptocurrencies have long been seen as tools for economic empowerment. Enthusiasts promote digital coins — exchanged using a network of computers that verify transactions, rather than through centralized entities like banks — as a means of transforming wealth for people of all backgrounds outside the traditional financial system.
But for all those supposedly egalitarian principles, the collapse of cryptocurrencies has revealed a huge divide: As employees of cryptocurrency companies lose their jobs, ordinary investors suffer huge losses, and executives are relatively unscathed.
No cryptocurrency investor is completely out of an economic downturn. But as prices have soared over the past two years, a small group of industry giants has amassed huge fortunes, providing them with an enviable cushion. Many of them bought bitcoin, ether and other virtual currencies years ago at a fraction of their current value. Some locked in gains early and sold some of their crypto assets. Others run publicly traded cryptocurrency companies and cash out of their stocks or invest in real estate.
By contrast, many amateur traders flocked to the crypto market during the pandemic, when prices had already started to soar. Some have poured out their life savings, leaving them vulnerable to collapse. Thousands are also flocking to work in crypto companies, believing it to be a ticket to new wealth. Many of them have now seen their savings disappear or lose their jobs.
Todd Phillips, director of financial regulation and corporate governance at the libertarian think tank Center for American Progress, said the aftermath of the cryptocurrency crash follows the pattern of other financial recessions.
“No matter what, those who have money will get better in the end,” he said.
Forbes March 16 Richest Crypto Billionaires Have Total Wealth of Over $135 Billion estimatedAs of this week, the total amounted to about $76 billion, but most of the losses were borne by a billionaire Changpeng Zhao, the CEO of cryptocurrency exchange Binance, whose $65 billion fortune shrank to $17.4 billion.
For retail investors like 33-year-old Ben Thompson, the reality is different. Mr Thompson, who lives in Sydney, Australia, lost about $45,000 – half his savings – in the crash. He has been involved in crypto since 2018 and plans to use the money to open a brewery.
“A lot of people who seem prestigious are confident,” Mr Thompson said. “The smaller ones will be taken advantage of.”
Even within crypto companies, the uneven impact of the crash is evident. Coinbase, the largest U.S. cryptocurrency exchange, went public in April 2021, when interest in digital currencies surged. CEO Brian Armstrong sold nearly $300 million in stock as part of the company’s public offering. In December, he it is said Purchased a $133 million property near Bel Air, Los Angeles.
Six Coinbase executives have collectively sold more than $850 million worth of stock since April 2021, according to Equilar, which tracks executive compensation. Chief Operating Officer Emilie Choi has earned about $235 million, while Chief Product Officer Surojit Chatterjee has sold $110 million in stock. Coinbase stock, which peaked at $357 in November, is now trading at $51.
This month, Coinbase laid off 18% of its workforce, or about 1,100 employees, as it grappled with falling prices and declining consumer interest in cryptocurrencies.Mr Armstrong said the company had “Overhiring.”
Coinbase also eliminated hundreds of jobs. Some of these new hires have quit their previous jobs or rely on Coinbase to maintain their jobs. working visa.
After months of interviewing, product manager Michael Doss accepted the job at Coinbase in May. When Coinbase retracted the offer, he had cancelled the lease and arranged to move to the UK and join the company’s London operations.
“I have to relax all this,” said Mr Doss, 33. “It’s what I see as a career development move.”
A Coinbase spokesman declined to comment on the layoffs and the canceled offer. Many of the stock sales are part of the direct listing process, and executives “retain key positions in the company, reflecting their commitment,” she said.
The cryptocurrency crash began in May when an experimental token called TerraUSD lost almost all of its value almost overnight, while also destroying sister digital currency Luna. Its debacle devastated some retail traders who had spent their life savings on TerraUSD through Anchor Protocol, a lending scheme that let investors deposit tokens and earn up to 19.5% interest.
TerraUSD was launched by Terraform Labs, a startup that raised capital from venture capital firms including Galaxy Digital and Lightspeed Venture Partners. Some of these investors cashed out before the project collapsed.Galaxy Digital in the document it says The sale of its Luna holdings was the “biggest contributor” to first-quarter earnings of $355 million before the crash. (The company declined to comment for this article.)
The fallout from the Luna-Terra crash spread, hitting the prices of two of the most valuable digital currencies, bitcoin and ether. Last year, 30-year-old Elliot Liebman musician A company in Austin, Texas, started investing a portion of every paycheck in some of these currencies, hoping to build up a reserve. Of his $10,000 investment, he has about $3,000 left.
“People say this technology will level the playing field,” Mr Liebman said. “It’s clear that a lot of people are going in the wrong direction.”
The crash worsened this month when crypto bank Celsius Network announced it was halting withdrawals. As prices fell, Gemini became the first major crypto firm to announce layoffs, followed by BlockFi, Crypto.com and Coinbase.
Still, unlike Coinbase, the vast majority of these crypto companies are privately held, meaning their value is less tied to day-to-day price fluctuations. This provides some company executives with a degree of protection.
“My personal net worth probably hasn’t been affected much,” MoonPay CEO Ivan Soto-Wright said. The $3.4 Billion Crypto Payments Startup. “We’re sitting on huge cash reserves.”
Mr. Soto-Wright recently purchase A $38 million seven-bedroom mansion in Miami with a spa and outdoor kitchen, according to Zillow. He said he was trying to build a studio where artists working with MoonPay could come and make music.
“It’s almost like a hacker’s house,” he said. “It’s a good investment.”
Winklevosses started hoarding bitcoin in 2012, when its price was hovering below $10. Even after the crash, it was still a lucrative investment for them: Bitcoin peaked at nearly $70,000 in November and is now near $20,000. In 2014, Winklevosses founded Gemini and raised $400 million from investors.
The brothers founded their band Mars Junction as a pandemic project.As the crypto markets crash this month, they embark on their tour programme Asbury Park, NJ
“My contract with myself is that it’s going to be for fun,” lead singer Tyler Winklevoss said. wrote in a blog post About the band.
About 50 spectators attended their performance at Englewood’s Gothic Theatre last week. Two women showed up wearing Harvard sweatshirts they bought on eBay, a tribute to the campus where Winklevosses battled Mark Zuckerberg for control of Facebook. A concession stand sells branded merchandise, including hats, T-shirts and tote bags; a portion will be donated to MusiCares, a charity that helps musicians recover from drugs, according to Taylor’s blog post.
During the 90-minute show, the Winklevosses looped a series of rock classics, with Cameron on guitar. A small group danced in front of the stage as the band covered a red pepper song.
“Hit me,” Tyler growled into the microphone. “You can’t hurt me.”