Why finance professionals who switched careers to crypto are unfazed by layoffs

Bankruptcies and job losses have proliferated worldwide among digital asset companies

Bitcoin has plunged about 70 per cent from a record high of just under $69,000 in November last year, partly because tightening monetary policy globally sapped liquidity from financial markets. ReutersShow less

The finance professionals who switched from traditional careers to the cryptocurrency sector are now seeing the latter retrench globally, but South Korea’s highest-profile example of such a job move has no regrets.

Lee Mi-seon, 39, became research head at eight-year-old cryptocurrency exchange Bithumb in March after 12 years as a bond strategist at conglomerate Hana Financial Group, where she won media accolades for her forecasts.

Two months after her move, virtual coins began a chaotic $1 trillion rout sparked partly by the $40 billion implosion of South Korean entrepreneur Do Kwon’s Terraform Labs ecosystem and related algorithmic stablecoin.

Bankruptcies and job losses have since proliferated worldwide among digital asset companies.

“It was kind of terrifying to witness what happened through May and June” as there’s no backstop for cryptocurrency unlike in traditional finance, Ms Lee said.

But she still sees long-term growth potential in the sector as a whole, and hence “more opportunities for one to continue with his or her career regardless of current job security”.

She argues one reason is because conventional companies will continue to expand into cryptocurrency. The extent to which that will happen remains arguable.

But only this month BlackRock, the world’s largest asset manager, introduced a private Bitcoin trust for big institutional clients and partnered with Coinbase Global to make it easier for institutions to manage and trade the token.

Even so, layoffs are still casting a long shadow across the industry.

Exchanges Coinbase and Crypto.com, lending platform BlockFi and non-fungible token marketplace OpenSea are among the companies that have cut jobs.

South Korea’s previously enthusiastic embrace of virtual coins has also cooled. As in other nations, regulators are asking more questions after spectacular blow-ups.

Bithumb — which according to CoinGecko data as of August 26 processes a daily average of about $360 million in trades — was among exchanges raided by local prosecutors as part of a probe into Terraform Labs.

Ms Lee was named best bond analyst by publications such as Maeil Business Newspaper, Yonhap Infomax, Korea Economic Daily and Chosun Biz.

She hopes her crypto research can help avert a “dystopian” endpoint for blockchain-based innovation and thinks more jurisdictions can make Bitcoin legal tender.

The token has plunged about 70 per cent from a record high of just under $69,000 in November last year, partly because tightening monetary policy globally sapped liquidity from financial markets.

Ms Lee said Bitcoin is in the process of bottoming out as much of the bubble in cryptocurrency has burst and investors have already priced in further interest rate hikes by the Federal Reserve.

Cryptocurrencies — in pictures

The crypto market, which includes currencies such as Bitcoin, pictured, has lost $2 trillion of its value in six months. Unsplash

The price of Ethereum, the second largest cryptocurrency by market size, has fallen by 70 per cent this year. Investors and analysts are watching to see if it will dip below $1,000. Unsplash

Dogecoin, supported by Elon Musk, is about 90 per cent down from May last year, yet it is outperforming Bitcoin and Ethereum in the current crash. Unsplash

The government of El Salvador has invested $105 million in Bitcoin. President Nayib Bukele's embrace of the cryptocurrency as legal tender is being questioned as the market crashes. Getty

Changpeng Zhao, founder of crypto exchange giant Binance, has compared the current market turmoil to the dotcom bubble of the early 2000s. Still, the company is aggressively pursuing licensing in international jurisdictions and introducing new products. Getty

Tether is the biggest issuer of stablecoins, a type of cryptocurrency pegged to a traditionally stable asset like the US dollar. Most stablecoins are meant to maintain a constant price of $1 and are backed by real reserve funds, making it easy to convert crypto investments into cash. But Tether's financial statements show that may not be true, leaving the issuer and its investors vulnerable. Unsplash

The recent crypto crash can in part be attributed to the collapse of TerraUSD, a stablecoin pegged to the US dollar through algorithms and linked to a "sister" cryptocurrency named Luna. When the price of Luna plummeted, TerraUSD also fell, creating a “death spiral” to practically zero for both coins. Unsplash

On June 12 crypto lender Celsius Network said it had paused customer withdrawals, saying it needed “to stabilise liquidity and operations”. Investors are still waiting, with no signs that the current meltdown will let up. Getty