Fall in Bitcoin prices hit startups hard

Cryptocurrencies had become a global fad, with several hopeful investors and budding entrepreneurs purchasing various forms of it in hopes that they will lend huge returns. Several startups have sprung up to provide a safe online platform to trade various cryptocurrencies with usual fiat currencies and vice versa, with some of them successfully raising amazing sums of money in funding rounds backed by prestigious venture capitalists (VCs). However, 2018 has seemingly not been a good year for Bitcoin, one of the most popular cryptocurrencies, since it has seen its value drop from an all-time high of over $20,000 to a paltry $3700. This drop in its value has not gone well with startups hoping to provide trading services for the mysterious currencies.

Cryptocurrencies by nature are highly unpredictable, with no central bank to govern and regulate its value and obscure criteria for the rise and fall in their value. However, the decentralized structure of bitcoin exchanges are highly secure and cannot be manipulated by hackers, given a highly sophisticated form of a distributed online ledger that makes it virtually impossible for unauthorized access or any other form of malicious activity. The technology that is used to operate these ledgers is called blockchain.

In light of the sharp decline in the value of Bitcoin, several startups that provide trading services for Bitcoin has had it difficult. Bitmain, a company that provides hardware to mine Bitcoin is looking to lay off half of its staff. The company had raised over $800 million from big names in VCs like Sequoia and Softbank. It was valued at over $12 billion and was planning an IPO at the Hong Kong Stock Exchange. Bitmain is not the only one to be hit by this fall, with others like Beijing based Huobi and Brooklyn based Consensys have also had to lay off staff.