Bitwise cuts 14% of staff as crypto slump squeezes mid-tier ETFs
Bitwise Asset Management has laid off 14% of its staff, a sign that the prolonged crypto winter and a retail shift toward prediction markets are squeezing mid-tier ETF issuers even as giants like BlackRock consolidate market share.
Bitwise Asset Management has cut its workforce by 14%, reducing headcount to approximately 155 from 180. The San Francisco-based firm, which manages about $9 billion across more than 70 products, confirmed the reductions as the cryptocurrency sector enters the tenth month of a broad slump.
The layoffs highlight the winner-take-all reality of the U.S. spot Bitcoin ETF market. While the sector holds roughly $77.5 billion in net assets, Bitwise's $2.3 billion fund accounts for less than 3% of that total. The market is overwhelmingly dominated by BlackRock's IBIT, which holds $47.3 billion, and Fidelity's FBTC at $10.9 billion, according to SoSoValue.
Bitcoin has fallen by roughly half since reaching a record in October 2025, currently trading around $64,000. This prolonged price decline has triggered a wider survival crisis across the digital-asset industry, compressing revenues for asset managers.
Bitwise joins a growing list of crypto companies slashing costs to survive the downturn. Coinbase cut 14% of its workforce in May, with CEO Brian Armstrong citing market conditions and the disruptive impact of AI, while prime broker FalconX cut 10% of its staff in August to focus on derivatives. The pressure has forced outright closures, with exchanges BitMEX and BitMart shutting down after 11 and nine years respectively.
Driving the industry's pain is a structural rotation of retail capital toward sports-betting platforms and AI stocks. CoinGecko data shows spot trading volume across the ten largest centralized exchanges fell 27.9% to $1.95 trillion in the second quarter. Barclays analysts have dubbed prediction markets "retail's shiny new toy," with notional volume surging 48.7% to a record $113.8 billion, while a Wintermute report found speculative money rotating into equities since late 2024.
Bitwise executives remain publicly optimistic despite the headwinds. Chief executive Hunter Horsley noted that the current staff count remains the largest in the firm's eight-year history and expressed confidence in future growth. Chief investment officer Matt Hougan told Bloomberg Television this week that the market may be nearing the bottom of its winter, arguing that a recent exploit draining more than $100 million from self-custody wallets actually strengthens the case for holding Bitcoin through regulated ETFs.
