Original author: ChandlerZ, Foresight News
Bloomberg reported on August 12 that cryptocurrency asset management firm Bitwise has laid off approximately 14% of its staff. Bitwise subsequently confirmed via email that the headcount has been reduced from around 180 to about 155 people. Based on these two approximate figures, this represents a reduction of roughly 25 positions. The company did not disclose the specific departments affected, the compensation packages involved, or subsequent adjustment plans.
In response, Bitwise CEO Hunter Horsley stated that the adjusted team remains the largest in the company's eight-year history and expects the company to continue growing as crypto assets integrate into the global economy. While the company remains optimistic about long-term growth, its current personnel and product configuration are beginning to tighten.
Several other crypto companies have been downsizing their teams this year as well. Coinbase laid off about 700 employees in May, representing 14% of its global workforce, citing market volatility, cost control, and organizational restructuring driven by AI. On-chain data platform Dune cut 25% of its staff the same month, with its CEO also mentioning efficiency gains from AI. BitGo reduced its workforce by 15% in June, focusing resources on security, trading, stablecoins, settlement, and AI infrastructure. Bitwise has not disclosed the specific reasons behind this round of layoffs nor attributed them to AI. It remains unclear whether there is an organizational-level correlation between these staff reductions and the company's product adjustments.
Client Assets Decrease by at Least $4 Billion, Eight ETFs Subsequently Exit
Prior to the staff adjustments, the reported caliber of Bitwise's client assets had already shown significant changes. In a product announcement released on February 3, Bitwise claimed client assets exceeded $15 billion. However, another announcement issued on May 1 indicated that as of April 1, client assets stood at $11 billion. Based on the company's own disclosed figures, this represents a minimum decrease of $4 billion. Bitwise did not specify how much of this change was attributable to price fluctuations, subscription/redemption activities, or changes in statistical scope.
Client assets is a statistical measure influenced simultaneously by market prices and capital flows. Price increases or decreases alter asset valuations, client subscriptions and redemptions change managed shares, and the addition or termination of products can also alter the scope of statistics. Data from two points in time cannot isolate the individual contributions of these factors. Bitwise has not published the relevant breakdowns, so the decrease of at least $4 billion cannot be directly equated to net client redemptions.
Bitwise's business includes ETFs, private funds, separately managed accounts, staking, and on-chain investment products. The fee structures and billing bases for these various products are not uniform, and the company has not disclosed changes in the composition of these asset classes between the two reporting dates. The evident contraction in Bitwise's disclosed client asset base between these two points in time has put pressure on the fee-generating asset scale of its asset management business.
Product exits occurred almost concurrently during this period. On April 30, the Bitwise Funds Trust Board decided to liquidate the Bitwise Web3 ETF and the Bitwise Trendwise BTC/ETH and Treasuries Rotation Strategy ETF. These two funds ceased trading and completed liquidation in May. On June 30, the Board decided again to liquidate six options income ETFs linked to Coinbase, MARA, Strategy, GameStop, Circle, and Ethereum, respectively. These related funds ceased trading in August, with liquidation proceeds distributed.
Within approximately three months, Bitwise exited eight ETFs in a concentrated manner.
The first two funds covered Web3-themed stocks and a rotation strategy between Bitcoin, Ethereum, and U.S. Treasuries, respectively. The latter six relied on options tied to single stocks or Ethereum to generate income. The eight products had different investment logics, but their commonality was the need for ongoing trading, compliance, valuation, and disclosure support. Liquidations can reduce the number of products requiring maintenance, though their impact on revenue still depends on the asset size and fee rates of each fund prior to liquidation.
Old Products Exit, New Resources Flow to Staking and Tokenized Funds
During the period when the eight ETFs were exiting, Bitwise was still adding products in other directions. In April, the company launched an Avalanche ETP in the European market with an internal staking arrangement. In May, the Hyperliquid ETF officially went live. In June, the company took over the management of Superstate's Crypto Carry Fund, with assets exceeding $267 million, entering the field of tokenized fund management.
These new products also generate needs for custody, staking, compliance, and distribution. A change in product direction does not directly equate to a reduction in overall operational burden. It indicates that the company is still willing to allocate resources to new sectors, placing layoffs and product expansion on the same business ledger simultaneously.
In an announcement released on June 30, Bitwise stated that the company manages 70 investment products, serves over 5,500 private wealth management teams, registered investment advisors, and family offices, and collaborates with more than 20 banks and broker-dealers. The number of products signifies that the company needs to continuously bear operational workloads such as compliance, custody, trading support, information disclosure, and client service. After a reduction of roughly one-seventh of the team, the product structure will directly impact the business complexity that the remaining personnel need to manage.
Observing the concentrated liquidation of the eight ETFs alongside the new products launched during the same period reveals a pattern: Web3-themed funds and option income strategies built around single underlying assets are exiting, while products that directly track underlying crypto assets, offer staking rewards, or tokenize fund shares on-chain continue to receive investment.
After the headcount reduction from 180 to 155, the remaining products will be managed by a smaller team. Bitwise has not yet specified which positions are related to the product adjustments, nor has it disclosed any one-time termination costs associated with the layoffs.
