Bitwise Reduces Workforce by 14% Amid Ongoing Crypto Downturn

Summary

• Bitwise Asset Management has reduced its workforce by 14%, shrinking from 180 to about 155 employees.
• CEO Hunter Horsley stated that the company still has its largest staff in history and expects growth despite layoffs.
• The firm manages over $9 billion in assets across more than 70 products, including a $2.3 billion Bitcoin ETF.

Bitwise Asset Management has confirmed a workforce reduction of roughly 14%, decreasing its staff from around 180 to approximately 155 employees, as reported to Bloomberg. CEO Hunter Horsley highlighted that the firm retains its largest workforce ever and is optimistic about future growth as cryptocurrencies increasingly integrate into the economy.

Bitwise oversees about $9 billion in client assets through over 70 investment offerings, encompassing Bitcoin ETFs, managed accounts, private funds, and staking services. The layoffs come amid a challenging landscape for the cryptocurrency sector, with U.S. spot Bitcoin ETFs currently holding about $77.5 billion in net assets. Notably, BlackRock's IBIT leads with approximately $47.3 billion, while Fidelity's FBTC accounts for around $10.9 billion, according to SoSoValue. Bitwise’s fund, holding about $2.3 billion, represents less than 3% of the total market. Bitcoin's price has plummeted nearly 50% from its October 2025 peak of around $64,000, marking a downturn lasting about ten months.

Industry Contraction

The layoffs at Bitwise reflect a broader trend of downsizing within the cryptocurrency industry. Coinbase also cut its workforce by 14% in May, attributing the decision to market conditions and the rapid influence of AI. Similarly, prime broker FalconX recently laid off about 10% of its staff, primarily affecting its Singapore office, as it shifts focus to derivatives.

Some exchanges have shut down entirely. BitMEX, known for its pioneering perpetual swap, announced its closure after over 11 years of operation, while BitMart also ceased operations, impacting its token's value adversely.

Retail investors, who previously drove the crypto market, are now gravitating towards sports betting and AI stocks. CoinGecko's second-quarter report revealed a 48.7% surge in prediction market volume to a record $113.8 billion, while the trading volume on the top ten centralized exchanges dropped by 27.9% to $1.95 trillion, with the overall crypto market cap down by 12.6%. Analysts from Barclays have noted that prediction markets are becoming "retail's shiny new toy," with speculative investments shifting towards equities since late 2024, as indicated by a report from Wintermute based on JPMorgan data.

Despite the workforce reductions, Bitwise executives remain hopeful. Matt Hougan, the chief investment officer, suggested in a Bloomberg television interview that the market may be nearing the end of its downturn, emphasizing that recent exploits, such as the Coldcard incident which drained over $100 million from self-custody wallets, reinforce the case for Bitcoin held through an ETF.