Author: ChandlerZ, Foresight News
A Bloomberg report on August 12 stated that cryptocurrency asset management firm Bitwise has laid off approximately 14% of its staff. Bitwise later confirmed via email that its headcount was reduced from about 180 to about 155 employees. Based on these rounded figures, this represents a reduction of approximately 25 positions. The company did not disclose the specific departments affected, the compensation packages offered, or subsequent adjustment plans.
In response, Bitwise CEO Hunter Horsley stated that the adjusted team is still the largest in the company's eight-year history and expects the company to continue growing as crypto assets integrate into the global economy. The company remains bullish on long-term growth but has begun tightening its current personnel and product configurations.
This year, several other crypto companies have also downsized their teams. In May, Coinbase laid off about 700 employees, representing 14% of its global workforce. The company cited market volatility, cost control, and organizational restructuring driven by AI. On-chain data platform Dune also cut 25% of its staff in May, with its CEO also mentioning efficiency gains from AI. In June, BitGo reduced its workforce by 15%, focusing resources on security, trading, stablecoins, settlement, and AI infrastructure. Bitwise has not disclosed the specific reasons for this round of layoffs nor attributed them to AI. Whether there is an organizational-level correspondence between these staff reductions and product adjustments remains unconfirmed.
Client Assets Shrink by at Least $4 Billion, Followed by Exit of Eight ETFs
Prior to the personnel adjustments, the reported caliber of Bitwise's client assets had already changed significantly. In a product announcement on February 3, Bitwise stated client assets exceeded $15 billion. Another announcement released on May 1 showed client assets were $11 billion as of April 1. Calculating based on the company's own disclosed figures from these two times, the difference on the books is at least $4 billion. Bitwise did not specify the respective contributions of price fluctuations, subscriptions/redemptions, and statistical scope to this change.
Client assets is a metric simultaneously influenced by market prices and fund flows. Price increases or decreases change asset valuations; client subscriptions and redemptions change managed units; and the addition or termination of products can also alter the statistical scope. The data from these two points in time cannot separate the individual contributions of these factors. As Bitwise has not published the relevant breakdowns, the reduction 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 calculation bases for these various products are not uniform, and the company has not disclosed the composition changes of different asset classes between the two reporting times. The significant narrowing of Bitwise's disclosed client asset base between these two points in time puts pressure on the asset size available for charging fees in its asset management business.
Product exits occurred almost concurrently. 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. Both funds ceased trading and completed liquidation in May. On June 30, the Board again decided to liquidate six option income ETFs linked to Coinbase, MARA, Strategy, GameStop, Circle, and Ethereum respectively. These funds ceased trading and distributed liquidation proceeds in August.
Within about three months, Bitwise concentrated on exiting eight ETFs.
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 single-stock or Ethereum-related options to generate income. The investment logic of the eight products differed, but their common point was the need for ongoing trading, compliance, valuation, and disclosure support. Liquidation can reduce the number of products requiring maintenance, though its revenue impact still depends on each fund's asset size and fee rate 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 with an integrated staking arrangement in the European market. In May, the Hyperliquid ETF officially went live. In June, the company took over the Crypto Carry Fund from Superstate, with assets exceeding $267 million, entering the tokenized fund management space.
These new products also generate custody, staking, compliance, and distribution demands. Changes in product direction cannot be directly equated to an overall reduction in operational burden. It indicates the company is still willing to allocate resources to new tracks, resulting in both layoffs and product expansion appearing on the same business list.
In an announcement released on June 30, Bitwise stated it has 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 means the company must continuously bear operational workloads such as compliance, custody, trading support, disclosure, and client service. After the team is reduced by approximately one-seventh, the product structure will directly affect the business complexity that the remaining personnel need to maintain.
Observing the concentrated liquidation of the eight ETFs alongside the new products launched during the same period, Web3-themed funds and option income strategies built around single underlying assets exited, while products directly tracking underlying crypto assets, offering staking rewards, and tokenizing fund shares on-chain continued to receive investment.
After personnel decreased from 180 to 155, the remaining products will be managed by a smaller team. Bitwise has not yet clarified which positions are related to the product adjustments nor disclosed any one-time termination expenses.
