Bitcoin Price Dips Below $21,000 as Crypto Firms Announce Layoffs

It was most recently down 3.9% from its price at 5 p.m. on Monday, at $22,351, down about 67% from its all-time high in November last year at $67,802.

Coinbase Global Inc.,

one of the largest and most valuable crypto exchanges, said Tuesday that it was laying off 18% of its staff, a move that comes roughly a month after the company imposed a hiring freeze. Two other prominent crypto companies, Crypto.com and BlockFi, have also announced layoffs.

Coinbase shares were up 0.5% at $52.35. The stock has fallen 80% year to date.

Cryptocurrencies have been sinking along with other higher-risk assets as the Federal Reserve steadily reverses the aggressive monetary policies it adopted earlier in the coronavirus pandemic. Lately, its efforts to raise interest rates to combat surging inflation have further dented investors’ risk appetite.

The market value of the entire crypto sector has fallen to less than $1 trillion from about $3 trillion in November, according to CoinMarketCap. Those falls reflect a significant drop in trading activity and momentum, and until that turns around, industry players like Coinbase are likely to remain under pressure, said KBW Managing Director

Kyle Voigt.

Coinbase Chief Executive

Brian Armstrong

said the company had grown too quickly, expanding from about 1,250 employees at the start of last year to around 5,000 currently.

“We saw the opportunities but we needed to massively scale our team to be positioned to compete in a broad array of bets,” he wrote in a note to staff. “While we tried our best to get this just right, in this case it is now clear to me that we over-hired.”

The price of ether, the in-house currency of the Ethereum network, fell in recent trading about 1.8% from its 5 p.m. Monday price to $1,220. Over the weekend, the price fell below $1,360, the early 2019 high from the previous cycle.

Other cryptocurrencies were trading higher, though. Cardano was up 2.9%, Solana was up 5.5% and Stellar was up 1.5%.

Write to Paul Vigna at paul.vigna@wsj.com