Crypto company crises continue to emerge. What impact will they have on the market?

The cryptocurrency market downturn is affecting more than just token prices, with several top companies and venture capital firms, including Coinbase and Crypto.com , dealing with layoffs, insolvency and even possible bankruptcy, which will have lasting and far-reaching effects on the future operations of the industry.

When the cryptocurrency market experiences a crash, many people only think about the value of the coins they hold and the cryptocurrency market has lost. Unfortunately, there are also thousands of companies and employees that are affected due to the market downturn. For example, during the bear market, trading volumes on exchanges are significantly lower, which leads to a decrease in profits.

Several top companies have been impacted in the recent bear market that will forever change the way the cryptocurrency and blockchain industry operates. For example, Coinbase recently announced that they will be rescinding offers for potential employees and laying off 18% of their staff, while Crypto.com made a similar announcement with a 5% layoff. Three months ago, both companies were confident in their future profitability and never thought of the possibility of layoffs. The recent crash will serve as a reminder to all companies to never be overconfident in their ability to hire more employees, which will make them more conservative in their growth plans. Although this may seem like a negative consequence, it will be beneficial to the market in the long run. These companies will mature in their attitudes and they will be more cautious in growing their businesses, leading to more sustainable success.

Celsius, one of the largest lending platforms, recently announced that it has suspended withdrawals for its customers. Rumor has it that they are currently running out of liquidity to meet withdrawals on the platform and are experiencing a "bank run." As of today, Celsius has not been heard from for five days, and many are worried that the company is insolvent and $10 billion in user funds will not be recovered.

As in the case of Coinbase and Crypto.com, this incident will make lending companies more conservative in the future and more likely to hold more reserves in case a similar run happens again. This may mean lower yields that companies like Nexo and BlockFi can offer, but this is for the safety of user funds. It also teaches retail investors a valuable lesson about how to diversify their investments across different platforms, and that if a yield looks too good to be true, it probably isn't.

One of the most interesting and unexpected twists in this bear market is that venture capital firm Three Arrow Capital (3AC) may be liquidated for its more than $200 million loan to Aave. 3AC has been involved in some of the most notable cryptocurrencies and startups in the space, including BlockFi and Solana , and has more than $10 billion in assets. If their loan is liquidated, this could lead to a cascading liquidation event that could see Ethereum drop below $1,000.

In an unregulated and volatile market, such as we have seen in cryptocurrencies, hard lessons need to be learned before the market matures and becomes more resilient. The crypto market is only 14 years old, and like the stock market in 1806, there are still a lot of questions that companies need to figure out. While this is bad for prices and valuations of crypto companies and firms in the short term, it will provide a catalyst for a mature and stable cryptocurrency market in the coming years.