Billionaire Bitcoin investors Cameron and Tyler Winklevoss were seen soaking up the sun in Ibiza Wednesday – days after laying off nearly 70 staffers at their crypto-centered startup due to plummeting coin prices.
The firings came just two months after the brothers cut more than 100 workers at the company – and shortly after the pair had finished a cross country tour with their newly formed cover band.
The twins – perhaps best known for their protracted legal battle with fellow billionaire Mark Zuckerberg seen in The Social Network – were photographed beachside at the Blue Marlin VIP beach club, an exclusive venue frequented by the jet set.
Bottle service at the club, which sits on the cusp of the Mediterranean, can cost up to $5,000 a person.
With that said, the burly brothers, both aged 40 and worth a reported $3.4billion, fit right in with ritzy crowd – despite losing nearly half of their net worth in the recent crash.
The pair – former Olympic rowers who made a fortune in Bitcoin after having a role in the creation of Facebook – were characteristically inseparable during the excursion, and even shared a bottle of sunscreen as they took in the hot Spanish sun.
Billionaire Bitcoin investors Cameron (at right) and Tyler Winklevoss were seen soaking up the sun in Ibiza Wednesday – days after laying off nearly 70 staffers at their crypto-centered startup due to plummeting coin prices
The sighting comes days after the pair – perhaps best known for their protracted legal battle with fellow billionaire Mark Zuckerberg seen in The Social Network – engaged in the layoffs
The pair – former Olympic rowers who made a fortune in Bitcoin after having a role in the creation of Facebook – were characteristically inseparable during the excursion, and even shared a bottle of sunscreen as they took in the hot Spanish sun
Cameron looked unbothered Tuesday as he took a dip with his brother in the Mediterranean
BROTHERLY LOVE: Tyler helps his brother out of the sea during their sunsoaked holiday. Staffers nixed at the twins startup are likely wondering where that gallantry was last week and the month prior, which has seen nearly 200 staffers nixed from the company
While the two appeared to enjoy the trip, staffers at the brothers’ crypto exchange, Gemini, are likely less than impressed by the display – after 68 staffers were laid off from the firm Monday due to recent volatility seen in the crypto-sphere.
The firings – which the brothers said were due to ‘turbulent market conditions’ – came less than two months after the pair enacted a painful 10 percent staff cut, cutting lose more than 100 of the company’s roughly 1,100-strong workforce.
The unrest at the company would then worsen the very next week when the pair decided to kick off a month-long tour with their newly formed cover band, which sent staffers into a frenzy.
The Winklevosses – who founded the company in 2014 after becoming early adopters of Bitcoin – have yet to announce the layoffs; however, an anonymous source from within the company confirmed they had transpired Monday.
The twins – perhaps best known for their protracted legal battle with fellow billionaire Mark Zuckerberg seen in The Social Network – were photographed beachside at the Blue Marlin VIP beach club, an exclusive venue frequented by the jet set
While the two appeared to enjoy the trip, staffers at the brothers’ crypto exchange, Gemini, are were likely less than impressed by the display
Speaking to tech news outlet Techcrunch, the insider revealed that earlier that day, 68 names disappeared from the company’s internal slack channel.
The source added that the company admitted to the layoffs, explaining they were enacted to achieve ‘extreme cost cutting.’
What’s more, an internal document shared around the office last week reportedly showed plans to take the company from 950 employees to 800 – making staffers painfully aware of their situation, the source said.
Staffers were reportedly so unhappy with the discovery, one decided to share the internal document on the anonymous social media site Blind last week.
‘It’s come to my attention that at least one team member thinks it’s a good idea to post a snippet of our technology operating plan on a third party website (Blind),’ co-CEO Cameron wrote on Slack of the leak at the time, calling the breach ‘super lame.’
Cameron looked to bust a dance move during the twins’ holiday, despite the dire situation their current and former staffers are facingv
The billionaire investors seemed undeterred by the mass firings they have implemented the past two months amid the recent crypto crash
The investor then offered a bit of advice using terms crypto enthusiasts might understand.
‘Friendly reminder that Karma is the blockchain of the universe,’ the brother wrote.
Meanwhile, as the company grappled with the recent crypto market downturn, former and current employees were further frustrated by the brothers’ decision to tour with their newly formed cover band, Mars Junction.
The tour saw the blue blood twins – who were raised by a well-to-do family in Connecticut but were born in the Hamptons – make stops all across the country to cover glam rock songs such as Journey’s Don’t Stop Believin’ at lauded venues such as New Jersey’s Asbury Park.
Earlier this month, the pair finished up the tour in East Hampton, one of three posh towns that comprise their native Hamptons.
The tour was slammed by many as insensitive, given the fact that one week before it kicked off, the twins engaged in the mass layoffs, citing difficulties related to ‘current macroeconomic and geopolitical turmoil.’
A video of the Winklevoss twins performing ‘Don’t Stop Believin’ just one week after they laid off 10 percent of their workforce at a cryptocurrency startup has gone viral on social media
The video shows Tyler, left, and Cameron, right, performing an off-key rendition of the song in Asbury Park, New Jersey on Thursday as the 40-year-old twins lose billions of dollars amid a cryptocurrency market crash
‘Today is a tough day, but one that will make Gemini better over the long run,’ the brothers told staff members in a joint message on June 2.
‘Constraint is the mother of innovation and difficult times are a forcing function for focus, which is critical to the success of any startup.’
Since then, Bloomberg reports, their fortunes have slumped to just $3 billion each, from a high of $5.9 billion, due to their extensive cryptocurrency holdings.
It comes as recent market turbulence spurred by inflation has seen bitcoin drop below $20,000 from a high of more than $60,000 in November, with other coins falling at a similar rate.
The coins hit lows last month not seen in more than year, with Bitcoin, the world’s most popular cryptocurrency falling to $17,592, and no.2 coin Ethereum dropping to $879 – falling below key resistance markers that indicate investor sentiment.
Other popular coins – which typically follow the movements of the aforementioned coins – also fell at similar speeds.
The coins have since rebounded slightly, however, rallying over the weekend but still hovering around the symbolic levels – which for Bitcoin is around $20,000 and Ethereum $1,000.
Bitcoin, the world’s most popular cryptocurrency, dropped in June to a low not seen in a year and a half – $17,592.78 – falling below the important $20,000 resistance marker for the first time since 2020. It has since rebounded slightly, but is still well below desired levels
As of Wednesday at 2pm, the price of one Bitcoin stands at $23,617, and Ethereum at $1,555.
The recent volatility seen in the crypto sphere has experts warning of an impending crisis, amid economic uncertainty over the Fed’s recent decision to raise interest rates as well a recent report showing inflation reach a 42-year-high last month
That rumored uncertainty seemed to be enough for the twins – to clean house at their crypto operation.
Currently, the crypto sphere has seen more than a $1trillion of investments evaporate in a matter of months.
The drastic drop, spurred by high inflation and upcoming rate hikes from the Fed, saw other smaller tokens that usually move in tandem with the coin, such as Ethereum, fall to similar lows – spurring experts to warn of an impending crisis
Meanwhile, the recent Crypto crash represent a stark fall from grace for the coins from late last year, when they reached record highs – with Bitcoin hitting $69,000 and Ethereum surpassing $4,900.
The coins have since seen their value fall drastically, as experts warn of an impending ‘domino effect of bankruptcies and liquidations’ as the industry enters a bear market.
‘We’ve likely seen the worst of things in terms of any singular entity suffering, but most in the industry are braced for more to come,’ Joseph Edwards, head of financial strategy at fund management firm Solrise Finance, said of the looming crisis.
The coins’ spectacular crash spurred crypto lenders such as Celsius, Binance, Three Arrows and Babel Finance to suspend withdrawals last month, whenthe drop spurred a sell off that likely left the firms see much of their evaluations – comprised of others’ money – evaporate.
Adam Farthing, chief risk office for Japan at crypto liquidity provider B2C2, says the situation has him concerned that apart from a bear market, the mass withdrawals could spell doom for the industry as a whole, as firms try to deal with the losses.
‘There is a lot of credit being withdrawn from the system and if lenders have to absorb losses from Celsius and Three Arrows, they will reduce the size of their future loan books which means that the entire amount of credit available in the crypto ecosystem is much reduced,’ said
Farthing further warned: ‘It feels very like 2008 to me, in terms of how there could be a domino effect of bankruptcies and liquidations.’
US based lender Celsius Network announced it would suspend customer withdrawals earlier this month, after drops in May saw Bitcoin and Ethereum fall below previous resistance levels of $40,000 and $3,000, respectively.
A resistance level refers to price point where buyers are less inclined to buy coins – on their way down – or more inclined to sell them – on their way up – due to them reaching a marker where those who bought it at an earlier price feel pressured enough to sell.
The resistance markers met over the weekend were proceeded by sell offs seen during the week, causing Bitcoin to lose 20 percent of its value from last Monday, and more than half of its value from the beginning of the year.
Other currencies have had even more dramatic tumbles – with Ethereum down by more than 70 percent in the same period.
In a blog on Monday, Celsius said it would continue working with regulators and officials, but that it would pause its customer Q&A sessions.
A fall in stablecoins – a type of cryptocurrency designed to hold a steady value – further suggests people are pulling money from the sector at concerning speeds.
The coins are now nearing what market analysts commonly refer to as the ‘death cross,’ a bearish indicator which occurs when the 50-day moving average of a cryptocurrency dips below its 200-day moving average.
The fall follows problems at several major crypto firms, such as the collapse of stablecoin terraUSD, and of course the solvency issues seen at lenders such as Celsius.
Further declines, market players said, could have a knock-on effect as other crypto investors are forced to sell their holdings to meet margin calls – the minimum amount required for investors to incur profits – and cover losses.
One expert says the Federal Reserve is responsible for the downturn, after the agency announced it would be raising rates by 75 basis points this week, following a 25 basis point and a 50 basis point interest rate hike in March and May, respectively.
The hikes show the Fed is just now getting aggressive in tightening financial conditions amid record inflation seen the past year – and the coins’ volatility may continue to worsen, as rumors swirl over another prospective hike from the national bank in the coming weeks.
Bitcoin is a cryptocurrency – an online type of money which is created using computer code
Hedge fund strategist Peter Cecchini, of New York City based firm, Axonic Capital says the hikes, instead of quelling inflation, could likely increase the chances of a prolonged economic recession and a deep sell-off in the stock and crypto markets.
‘Stifling domestic demand with too-late rate hikes could now result in a prolonged recession, especially because policy works with a three-to-nine-month lag on the economy,’ Cecchini told Yahoo Finance over the weekend.
He added that that the Fed’s taking so long to raise the rates could serve as a double-edged sword, since by lowering consumer demand for goods and services with higher interest, commodity prices that are driving inflation will likely rise.
That scenario could potentially lead to economic hardship for millions, as well as a drastic drop in the crypto sphere.
Crypto hedge fund Three Arrows Capital is exploring options including the sale of assets and a bailout by another firm, its founders told the Wall Street Journal in a story published Friday, the same day Asia-focused crypto lender Babel Finance said it would suspend withdrawals.
The head of one of the largest crypto exchanges, meanwhile, says the Federal Reserve is responsible for the recent downturn.
‘The core driver of this has been the Fed,’ said Sam Bankman-Fried, the CEO of FTX Trading Limited, a popular platform used by investors to buy and sell cryptocurrency.
The Fed raising of rates to quell inflation – which reached a rate of 9.1 percent last month – has led to a ‘recalibration’ of expectations of risk, experts like Bankman-Fried say.
The rise was the largest interest rate increase since 1991.
The news has since seen the launch of other tokens delayed. Earlier this week, cryptocurrency exchange BitMEX delayed the listing of its native token BMEX amid volatile market conditions.
Bankman-Fried, who is worth a reported $21billion, said the national bank is ‘caught between a rock and a hard place’ with the aggressive hikes, due to the difficulty of the task in front of them.
The Fed’s raising of rates to quell inflation last week – which reached a rate of 9.1 percent in June – the highest monthly reading since November 1981 – could have an unintended effect on the crypto market, economists have warned
Bankman-Fried said a lot of his own outlook for his business is now dependent on decisions the Fed will make in the coming months, and whether the mass sell-offs seen in both the crypto sphere and world markets continue.
‘Literally, markets are scared,’ Bankman-Fried said. ‘People with money are scared.’
The fall in crypto markets has coincided with a slide for equities, as US stocks suffered their biggest weekly percentage decline in two years on fears of rising interest rates and the growing likelihood of recession.
Bitcoin’s moves have tended to follow a similar pattern to other risk assets such as tech stocks.
The overall crypto market capitalization is roughly $926 billion, according to price site Coinmarketcap, down from a peak of $2.9 trillion in November 2021.