FalconX Cuts 10% of Workforce as Crypto Winter Drags On
Digital asset prime broker FalconX has reportedly cut 10% of its global staff as the crypto slump wears on. The timing is brutal. FalconX bought crypto ETF issuer 21shares last November, yet that acquisition—and the company’s access to capital—did not prevent layoffs. I’ll be honest: that says more about the depth of the downturn than the deal itself.
Bloomberg reported Monday that FalconX employed about 350 people before the cuts, with staff in the United States, the United Kingdom, Singapore and Hong Kong. Singapore is another pressure point. FalconX plans to withdraw its license application from the Monetary Authority of Singapore and focus on regional crypto derivatives trading. It also intends to expand in Europe. Coinbase, Crypto.com, Luno, Gemini and BitGo have all scaled back during the downturn, so FalconX is hardly alone.
Bitcoin (BTC) is trading below $64,000, roughly half its October peak of more than $126,000. Why does this matter? Because a fall of that size forces companies across the industry to reconsider plans that looked reasonable near the peak. Payroll is part of it. The pressure runs deeper. High interest rates and inflation have drawn money away from risky assets, and crypto has suffered. We’ve seen this pattern before: when traditional markets tighten, speculative assets tend to get hit first. Analysts still disagree about where the bottom is, so investors should brace for steep price swings. More industry consolidation is possible too.
Most commentary treats spot trading as the heart of an exchange business. That is only half right now. Exchanges are already moving beyond the spot trading operations that once paid most of their bills. Coinbase’s latest earnings report showed that 88% of its second quarter net revenue came from sources other than spot Bitcoin trading. That figure caught my eye. Derivatives and prediction markets now bring in much more of the business. Tokenized assets are beginning to generate revenue too.
CoinGecko found that the sector it calls “crypto TradFi,” including derivatives and tokenized assets, grew fivefold between January 2025 and June 2026 to reach $6.6 billion. Tokenized stocks and commodities drove much of the increase. Put plainly, crypto companies are pulling products from Wall Street’s shelf and placing them on blockchains. Is demand proven? Not yet. It is still unclear how many customers want those products. Even so, my take is that this looks more like a lasting change in how exchanges intend to make money than a temporary patch.
Cointelegraph asked FalconX for comment but did not receive an immediate response. Still, the company’s choices tell part of the story. Retail activity is down. Spot trading volumes remain weak. FalconX and Coinbase are turning to derivatives and tokenized assets because their previous revenue mix is no longer pulling its weight. Counter to the usual advice, diversification here is not merely preparation for the next bull market. It is also a way to avoid depending entirely on customers trading coins whenever that bull market finally arrives.
What this means
FalconX’s layoffs suggest that the crypto market remains stuck in a long consolidation. Companies are cutting costs because spot trading cannot support them reliably on its own, while product mixes are changing in response. The shift may outlast the downturn. For investors, businesses with several revenue sources may hold up better, particularly platforms that connect crypto with conventional finance. Coinbase is the clearest example: its revenue mix has changed sharply as spot volumes have dropped. One correction matters, though. COIN is the ticker for Coinbase’s listed stock, not an exchange token.
The Federal Reserve is the next thing to watch. Upcoming FOMC meetings—and any change in the Fed’s stance on interest rates—could push money back toward risky assets and support Bitcoin. But the Fed is not the whole story. Tokenized asset volumes deserve attention, as does demand for crypto derivatives. Why track both? Because growth in those markets would help show whether exchanges have found real customers for this business model.
The near term Bitcoin levels are fairly clear: staying above $60,000 would relieve some pressure. A sustained drop below that mark could lead to further losses. A climb toward $70,000, meanwhile, might signal that institutional buyers are coming back. Yes, that sounds more confident than the evidence allows. I would not put too much faith in either number. Crypto does that. A tidy chart level can collapse before lunch.