It is not the best time to hunt for a job in the cryptocurrency sector right now. According to a recent Brookings Institution analysis, available positions at crypto companies in the United States have plummeted, with some key cities experiencing a dip of up to 80%, following a tremendous 2021 and early 2022.
Extreme boom-and-bust cycles have long been a hallmark of the cryptocurrency industry, but the recent years have been particularly dramatic. Bitcoin reached almost $70,000 in November 2021 before the sector suffered a catastrophic decline as a result of the failure of well-known projects like FTX and the subsequent enforcement actions from governmental bodies.
In the midst of the boom, proponents of cryptocurrencies painted the market for digital assets as one with possibility and room for expansion. Local authorities from Texas to Florida attempted to cash in on the hype, with Miami Mayor Francis Suarez even establishing his own doomed cryptocurrency token in a bid to portray the city as welcoming to the industry.
The authors of the Brookings paper, Tonantzin Carmona, Mark Muro, and Sifan Liu, highlight the risks posed by the industry’s instability for job creation. The number of new crypto businesses has decreased from a peak of 80 per month in January 2022 to just two in April 2023.
The dip reflects the challenging times in the market, which have seen crypto values fall, well-known companies fail, and industry leaders exposed as con artists. Numerous crypto firms have relocated to major U.S. cities like New York and Los Angeles, yet the number of open job postings has drastically decreased since then.
According to the Brookings researchers, the decline should serve as a warning to metro regions as they look to draw “disruptive” technologies. Few of the enterprises and employment that have been associated with it have been stable or sustainable, they note, despite some state and municipal governments’ efforts to promote cryptocurrency activity. Many of the businesses instead produced fraud prosecutions and investment losses for local law authorities.
Many businesses are starting to go outside to more hospitable jurisdictions as the U.S. crypto industry continues to operate on shaky regulatory terrain. Early in May, Gemini and Coinbase, two of the few publicly traded cryptocurrency companies, established offshore exchanges alongside Binance. Following lawsuits by governmental organizations, US’s future in the US is in doubt. Even in New York, one of the few U.S. states with a crypto legal framework, businesses have announced their desire to relocate abroad due to tighter regulation.
To the dismay of crypto enthusiasts, many investors are currently chasing the next artificial intelligence hype cycle, with some investment firms indicating interest in the field. The search interest for “A.I. jobs” soared four times higher than that for “crypto jobs” in June, according to a new study from the cryptocurrency data.
According to the Brookings experts, the data demonstrates why cities should concentrate on more “critical” technological industries, like biotechnology and energy. They suggest that the majority, if not all, locations where the crypto bubble burst should be a wake-up call for local officials to consider different plans for regional economic development. Despite the excitement, not all cutting-edge technologies are promising.
