Shalini Nagarajan

<div id="highlights-block_635a706654222" class="highlights">
 <ul>
 <li>The firm was last valued at $14 billion in March, nearly triple what it was worth just one year earlier</li>
 <li>Reports indicate Blockchain.com is now seeking to raise at as little as $3 billion</li>
 </ul>
 
</div>



Crypto exchange <a href="https://cms.blockworks.co/tag/blockchain-com/" target="_blank" rel="noreferrer noopener">Blockchain.com</a> is reportedly on the hunt for funding, but it may have to cop a significant down round as a result of the bear market.



Blockchain.com, which doubles as a financial services firm across the crypto space, is in talks for a round that could take its valuation to between $3 billion and $4 billion, <a href="https://www.bloomberg.com/news/articles/2022-10-26/blockchain-com-in-talks-to-raise-funds-at-shrunken-valuation" target="_blank" rel="noreferrer noopener">Bloomberg reported</a> on Thursday.



That would be 70% lower than its <a href="https://finovate.com/blockchain-com-raises-series-d-funding-at-14-billion-valuation/" target="_blank" rel="noreferrer noopener">$14 billion valuation</a> in March, when the firm closed a Series D round led by Lightspeed Capital Ventures for an undisclosed amount. Founded in 2011, the firm has raised a total of $490 million over seven fundraising rounds, <a href="https://www.crunchbase.com/organization/blockchain-info/company_financials" target="_blank" rel="noreferrer noopener">Crunchbase data</a> shows.



The move comes after <a href="http://blockchain.com" target="_blank" rel="noreferrer noopener">Blockchain.com</a> reportedly raised a strategic funding round, again of an undisclosed amount, led by UK-based investment firm Kingsway Capital in the third quarter. Terms of the latest deal are still developing and not final yet.



Blockchain.com was one of several major players in the space to lay off employees during tough market conditions, <a href="https://cms.blockworks.co/blockchain-com-slashes-25-of-workforce-cuts-exec-compensation/" target="_blank" rel="noreferrer noopener">slashing 25%</a> of its workforce in July. Around six weeks earlier, Blockchain.com CEO Peter Smith <a href="https://cms.blockworks.co/blockchain-com-ceo-on-crypto-winter-were-now-entering-despair/" target="_blank" rel="noreferrer noopener">told</a> Blockworks the crypto ecosystem was entering the &#8220;despair&#8221; phase of the bear market. 



The firm was also reportedly exposed to embattled crypto hedge fund <a href="https://cms.blockworks.co/tag/three-arrows-capital/" target="_blank" rel="noreferrer noopener">Three Arrows Capital</a>, which owes it $270 million as of its July insolvency.



All this while venture capital (VC) funding for the crypto sector has slowed dramatically, as the prices for bitcoin and other cryptoassets plunged amid a broader market downturn throughout the year.



VC firms around the world invested just $4.44 billion in crypto startups in the third quarter, a 37% year-on-year drop, <a href="https://www.bloomberg.com/news/articles/2022-10-11/crypto-startup-funding-q3-plunges-alongside-bitcoin" target="_blank" rel="noreferrer noopener">Bloomberg said</a>, citing PitchBook data.



The flagship crypto fund for Andreessen Horowitz, one of the most prominent VCs in the space, <a href="https://cms.blockworks.co/flagship-a16z-crypto-fund-lost-40-in-first-half-of-2022-wsj/" target="_blank" rel="noreferrer noopener">lost around 40%</a> of its value in the first six months of this year. For scale, the total digital asset market shed 60% across the same period.



Blockchain.com didn’t return Blockworks’ request for comment by press time.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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Blockchain.com Eyes Funding at 70% Lower Valuation: Report

<div id="highlights-block_62d950c1064a9" class="highlights">
 <ul>
 <li>CEO Peter Smith told Blockworks last month that many crypto firms spent unsustainably</li>
 <li>Smith and other executives will take compensation cuts</li>
 </ul>
 
</div>



Blockchain.com is laying off 25% of its workforce to help cut expenses during tough market conditions, the company said on Thursday.



The news was first reported by <a href="https://www.coindesk.com/business/2022/07/21/blockchaincom-cuts-25-workforce-amid-crypto-bear-market/" target="_blank" rel="noreferrer noopener">CoinDesk</a>, which said around 150 employees will lose their jobs, taking the exchange’s headcount to the same level it was at the start of the year.&nbsp;



A <a href="https://cms.blockworks.co/tag/blockchain.com/" target="_blank" rel="noreferrer noopener">Blockchain.com</a> spokesperson confirmed the report when contacted by Blockworks.



The London-based exchange, which is <a href="https://www.coindesk.com/business/2022/07/08/crypto-exchange-blockchaincom-faces-250m-hit-on-loans-to-three-arrows-capital/" target="_blank" rel="noreferrer noopener">reportedly</a> owed $270 million from embattled hedge fund Three Arrows Capital, will also wind down offices in Argentina and drop further international expansion plans. A majority of employees affected are based in Argentina, with 44% of the job cuts happening there. More than 25% of the layoffs are based in the US, while 16% are in the UK, with the remaining located in other countries.&nbsp;



All laid-off employees will be offered severance benefits ranging from four to 12 weeks and third-party assistance to find another job for employees in the US and UK. Compensation for CEO <a href="https://cms.blockworks.co/tag/peter-smith/" target="_blank" rel="noreferrer noopener">Peter Smith</a> and company executives will also be whittled down.&nbsp;



Smith <a href="https://cms.blockworks.co/blockchain-com-ceo-on-crypto-winter-were-now-entering-despair/" target="_blank" rel="noreferrer noopener">told Blockworks</a> in a recent interview that Blockchain.com is the smallest crypto company of its kind by headcount, and many firms spent unsustainably — up to $800 million — on marketing costs during the current cycle. The exchange’s investors had pushed it to spend more on marketing and grow rapidly, he added, noting that firms who did go through with such a strategy lost ground.



Founded in 2011, Blockchain.com has raised a total of $490 million over seven fundraising rounds, <a href="https://www.crunchbase.com/organization/blockchain-info/company_financials" target="_blank" rel="noreferrer noopener">Crunchbase data</a> shows. Existing investors include Baillie Gifford, Kyle Bass, Vy Capital, Lightspeed Venture Partners and Digital Currency Group. It is among several hard-hit cryptocurrency firms that have had to diminish their headcount during the recent market downturn.



<a href="https://cms.blockworks.co/coinbase-cut-workforce-ceo-wary-of-potential-recession/" target="_blank" rel="noreferrer noopener">Coinbase</a>, <a href="https://cms.blockworks.co/crypto-com-cutting-5-of-workforce-amid-digital-asset-downturn/" target="_blank" rel="noreferrer noopener">Crypto.com</a>, <a href="https://cms.blockworks.co/bullish-joins-rival-crypto-exchanges-in-cutting-workforce-report/" target="_blank" rel="noreferrer noopener">Bullish</a> and <a href="https://cms.blockworks.co/coinbase-backed-vauld-cuts-workforce-by-30-seeks-to-halve-exec-pay/" target="_blank" rel="noreferrer noopener">Vauld</a> have all recently reduced staff, while <a href="https://cms.blockworks.co/gemini-exchange-cuts-workforce-for-second-time-in-2-months-report/" target="_blank" rel="noreferrer noopener">Gemini</a> and <a href="https://cms.blockworks.co/blockfi-initiates-voluntary-separation-program-to-further-trim-headcount/" target="_blank" rel="noreferrer noopener">BlockFi</a> have both cut jobs for the second time in two months.



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Blockchain.com Slashes 25% of Workforce, Cuts Exec Compensation

David Canellis

<div id="highlights-block_62a23eca75778" class="highlights">
 <ul>
 <li>Crypto has been in a bear market for nine months already, says Smith, and we’re now undoubtedly in crypto winter</li>
 <li>Blockchain.com was an early Terra investor but sold its LUNA stack before the crash</li>
 </ul>
 
</div>



Cryptocurrencies are collectively down 45% since the start of the year — squarely in bear market territory for the first time in three years.



As with crypto’s previous downturn spanning 2018 and 2019, layoffs are beginning to strike.&nbsp;



Employees at crypto exchanges have been the first on the chopping block – the likes of BitMEX and <a href="https://cms.blockworks.co/gemini-joins-growing-list-of-crypto-exchanges-cutting-staff-amid-downturn/" target="_blank" rel="noreferrer noopener">Gemini</a> have vowed to cut staff since April, while <a href="https://cms.blockworks.co/coinbase-latest-crypto-firm-to-cut-costs-amid-market-downturn/" target="_blank" rel="noreferrer noopener">Coinbase</a> plans to rescind accepted job offers to cut costs.



Without naming specific firms, Blockchain.com CEO Peter Smith at Amsterdam’s <a href="https://www.money2020.com/" target="_blank" rel="noreferrer noopener">Money20/20</a> conference this week said a lot of crypto companies grew too quickly, without focusing on becoming profitable.


<div class="wp-block-image">
<figure class="alignright size-medium"><img decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/06/Peter-Smith-Headshot-2022-200x300.jpg" alt="Blockchain.com CEO Peter Smith" class="wp-image-22696"/><figcaption>Blockchain.com CEO Peter Smith | Source: Blockchain.com</figcaption></figure></div>


“We’re the smallest crypto company of its kind by headcount —others have thousands of employees pre-profitability,” Smith said, noting that multiple firms unsustainably spent up to $800 million on marketing costs through this cycle.



Added Smith: “A lot of that has to wash out of the space, not just in crypto but fintech more generally. We’re going to see a fundamental rotation from growth to free cash flow.”&nbsp;



Smith said investors had pushed Blockchain.com, founded in 2011, to spend more on marketing and grow faster throughout the previous mania. Bitcoin surged from $9,000 to nearly $62,000 between the second half of 2020 and November 2021, triggering explosive growth across the crypto sector.&nbsp;



“Every company that pursued that strategy has had a dramatic rearing of their business – large growth rounds collapsing, companies are now raising at down-round prices – it’s going to be difficult for them to adapt,” Smith said. Earlier this week, <a href="https://www.theblockcrypto.com/post/150377/blockfi-is-raising-a-down-round-at-1-billion-valuation-sources" target="_blank" rel="noreferrer noopener">reports</a> surfaced that crypto lender BlockFi was looking to raise funds at a $1 billion valuation, down from $3 billion at its previous round in March 2021.



<h3 class="wp-block-heading">The three epochs of crypto bear markets</h3>



In Smith’s estimation, the current bear market has been going for nine months — leading to more possible pain on the horizon if past patterns repeat.&nbsp;



It’s up for debate, however, whether a bear market equates to the dreaded “crypto winter.”&nbsp;



After all, the previous bear market lasted significantly longer than nine months, and the depths of crypto winter saw bitcoin sink to almost 90% below its 2017 peak. 



In an interview with Blockworks, Smith outlined what he dubs the three epochs of bear markets: the beginning, which is hard to sense; the middle, where despair kicks in; and the new normal.&nbsp;



“We’re entering the second epoch [despair], which is my favorite,” Smith said. “I’m a free market capitalist, and I enjoy the cleansing power of the market.”&nbsp;



Otherwise known, he said, as the chapter where tides go out and we all see who’s wearing pants, <a href="https://www.berkshirehathaway.com/2001ar/2001letter.html" target="_blank" rel="noreferrer noopener">echoing</a> Warren Buffett from a 2001 Berkshire Hathaway earnings call. Buffett is a <a href="https://www.cnbc.com/2022/04/30/warren-buffett-gives-his-most-expansive-explanation-for-why-he-doesnt-believe-in-bitcoin.html" target="_blank" rel="noreferrer noopener">vehement</a> crypto skeptic.



This stage is also defined by the ability to differentiate quality projects, to the benefit of customers, teams and shareholders.&nbsp;



“The last stage is when everybody looks around and says, ’Oh, this is crypto now, and we’re all going to figure out how to make this thing work.’”



<h3 class="wp-block-heading">Blockchain.com exited its LUNA position before the crash</h3>



Blockchain.com never listed Terraform Labs’ failed stablecoin UST, although the platform did offer LUNA. Smith resisted UST, describing the decision to avoid the stablecoin as “not a popular choice.” There was some internal pressure to offer it so users could unlock up to 20% APY on lending platform Anchor.



“Consumers love 20%, but consumers also hate zero,” Smith said, referring to LUNA and UST’s collapse.&nbsp;



Blockchain.com, though, was an early investor in LUNA, long before UST. Smith said he had doubts about the Terra ecosystem’s sustainability and ultimately exited the position before the crash.



“Anything that goes up too fast worries me,” Smith said. “Solana also went up too fast.” Solana currently changes hands for $41 —85% below its $260 record high recorded in November.



Smith also doubted algorithmic stablecoins, despite investing in a few. He said it would be “very cool” for one to work, but by default is inclined to believe they won’t and wants to be proven wrong.



Still, the crypto veteran scoffed at the idea of taking Justin Sun’s new algorithmic stablecoin, Decentralized US Dollar (USDD), seriously. USDD’s circulating supply has skyrocketed from zero to beyond $700 million since the start of May.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



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Blockchain.com CEO on Crypto Winter: We’re Now Entering ‘Despair’

Jacquelyn Melinek

<div id="highlights-block_619bff6ae8abd" class="highlights">
 <ul>
 <li> In general, the US has become a hotspot for crypto mining after many miners exited China, which led the way for extreme growth in North America</li>
 <li>Blockchain.com CEO Peter Smith said in a statement the company has partnered closely with GRIID over the past two years</li>
 </ul>
 
</div>



Bitcoin miner infrastructure firm GRIID has secured a $525 million credit facility from Blockchain.com, the company announced Monday.&nbsp;



The three-year-old Bitcoin self-mining company owns and operates facilities across the US with low-cost, carbon-free energy to build and scale its facilities. <a href="https://cms.blockworks.co/blockchain-coms-mcgarraugh-on-the-past-present-and-future-of-banking/" target="_blank" rel="noreferrer noopener">Blockchain.com</a> is one of the oldest cryptocurrency platforms with about 31 million verified users, over $1 trillion transactions and has generated more than $5 billion in loan originations. 



The four-year term credit facility will help GRIID scale its capabilities, bring on additional mining capacities and build upon its 1,300 megawatts of available power from its current “existing energy generation partners,” it said.&nbsp;



Blockchain.com CEO Peter Smith said in a statement that it has partnered closely with GRIID over the past two years to provide capital while investing in the growth of the business.



In general, the US has become a hotspot for crypto mining after many miners <a href="https://cms.blockworks.co/china-mining-exodus-seen-as-positive-for-bitcoin/" target="_blank" rel="noreferrer noopener">exited China</a>, which led the way for extreme growth in North America. 



The US has surpassed China as the world’s leader in bitcoin mining networks with an average monthly hashrate share of 35.4% in July of 2021, according to <a href="https://ccaf.io/cbeci/mining_map" target="_blank" rel="noreferrer noopener">data</a> from the University of Cambridge. 



Earlier this month, investment management firm Horizon Kinetics, which oversees $7 billion in assets under management, shared its plans to launch a new mining company as its investors were “clamoring for more” exposure to bitcoin, Chief Operating Officer Alun Williams told Blockworks in an <a href="https://cms.blockworks.co/horizon-kinetics-to-launch-new-bitcoin-mining-business/" target="_blank" rel="noreferrer noopener">interview</a>. 



“The US, when you compare it to other countries, is a very welcoming place to do this business,” Williams said at the time. “The industry itself is growing significantly here…and the US wants to embrace mining as an industry and take part of that,” he added. 



<hr class="wp-block-separator"/>



Get the day’s top crypto news and insights delivered to your inbox every evening. <a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a> now.



<hr class="wp-block-separator"/>

Blockchain.com Gives Bitcoin Mining Infrastructure Company GRIID $525M Credit

Liz Coyne

In the latest episode of Blockworks’ podcast “<a href="https://www.youtube.com/watch?v=QxSWCwxvF3A&amp;list=PLvER9nHSRN3wPkrDGTT5_8VC4Hjcq0f9U&amp;index=18" target="_blank" rel="noreferrer noopener">Empire</a>,” Jason Yanowitz , co-founder of Blockworks, sits down with Anil Lulla, chief operating officer at Delphi Digital, to talk about DeFi, crypto gaming and how he got so bullish on NFTs.



After completing a major in finance and a minor in entrepreneurship at Rutgers Business School, Anil worked at Bloomberg as a corporate bond analyst for two years. He then joined Deutsche Bank where he worked on structuring leveraged finance products, according to a bio on <a href="https://cointelegraph.com/top-people-in-crypto-and-blockchain/anil-lulla" target="_blank" rel="noreferrer noopener">CoinTelegraph</a>.



He left Deutsche Bank and co-founded Delphi Digital, a high-end digital-asset research firm that provides credible, actionable analysis for the crypto industry. Delphi also has a venture arm and a DeFi consulting wing.



Anil and Jason talked about:



<ul class="wp-block-list"><li>NFTs and music</li><li>What is Tokenomics?</li><li>How do you come across good crypto investments?</li><li>How do investors dive into different projects?</li><li>Did NFTs die?</li><li>Coordinating people across the metaverse&#8221;</li><li>How to hire people who make six figures on yield farming</li></ul>



Check out what they had to say in the video below. 👇



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="How to get started in DeFi | Anil Lulla" width="1024" height="576" src="https://www.youtube.com/embed/QxSWCwxvF3A?list=PLvER9nHSRN3wPkrDGTT5_8VC4Hjcq0f9U" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
</div></figure>



On &#8220;Empire,&#8221; once a week, Jason interviews individuals that have built the crypto industry to talk about their struggles, bold moves and tough decisions. For any NPR or Guy Raz fans out there, you can think of &#8220;Empire&#8221; like a “How I Built This” for the bitcoin and crypto industry.



Episodes are released every Thursday morning.&nbsp;



Subscribe to Empire today on&nbsp;<a href="https://apple.co/389JSpL" target="_blank" rel="noreferrer noopener">Apple</a>&nbsp;or&nbsp;<a href="https://spoti.fi/3uVnxpC" target="_blank" rel="noreferrer noopener">Spotify</a>. Watch episodes on&nbsp;<a href="https://www.youtube.com/playlist?list=PLvER9nHSRN3wPkrDGTT5_8VC4Hjcq0f9U" target="_blank" rel="noreferrer noopener">YouTube</a>.

Podcast: How to Get Started in DeFi

In the latest episode of Blockworks’ podcast “<a href="https://www.youtube.com/watch?v=49u9G32zjIY&amp;list=PLvER9nHSRN3wPkrDGTT5_8VC4Hjcq0f9U&amp;index=16" target="_blank" rel="noreferrer noopener">Empire</a>,” Jason Yanowitz , co-founder of Blockworks, sits down with Blockchain.com CEO Peter Smith. 



Peter has been in the crypto space for a long time — and he&#8217;s learned a thing or two about how the market ebbs and flows. He&#8217;s come to the conclusion that bitcoin&#8217;s success — as well as the success of his own company — doesn&#8217;t depend on other projects&#8217; failures. They also talk about:



<ul class="wp-block-list"><li>Richard Branson&#8217;s investment</li><li>What talking to early investors was like</li><li>Bitcoin&#8217;s international impact</li><li>Bitcoin&#8217;s tumultuous growth</li><li>DeFi</li><li>What&#8217;s the first thing someone should do to get into DeFi?</li><li>What&#8217;s the hottest trend in crypto companies right now?</li></ul>



Check out what they had to say in the video below. 👇



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="Blockchain.com CEO says Bitcoin Maxis are wrong about BitClout and DeFi" width="1024" height="576" src="https://www.youtube.com/embed/49u9G32zjIY?list=PLvER9nHSRN3wPkrDGTT5_8VC4Hjcq0f9U" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
</div></figure>



On &#8220;Empire,&#8221; once a week, Jason interviews individuals that have built the crypto industry to talk about their struggles, bold moves and tough decisions. For any NPR or Guy Raz fans out there, you can think of &#8220;Empire&#8221; like a “How I Built This” for the bitcoin and crypto industry.



Episodes are released every Thursday morning.&nbsp;



Subscribe to Empire today on&nbsp;<a href="https://apple.co/389JSpL" target="_blank" rel="noreferrer noopener">Apple</a>&nbsp;or&nbsp;<a href="https://spoti.fi/3uVnxpC" target="_blank" rel="noreferrer noopener">Spotify</a>. Watch episodes on&nbsp;<a href="https://www.youtube.com/playlist?list=PLvER9nHSRN3wPkrDGTT5_8VC4Hjcq0f9U" target="_blank" rel="noreferrer noopener">YouTube</a>.