Some of the largest technology conglomerates are on a hiring spree of blockchain developers amidst the worst correction in the 10-year history of the crypto sector.
Facebook reportedly confirmed that it has recently acqui-hired crypto startup Chainspace founded by University College of London Ph.D. researchers.
Speaking to CNBC, RBC internet analyst Zachary Schwartzman said:
“On the surface, it may appear that Facebook purposefully hired the technical team related to DECODE. But we don’t believe this was the case. Our view is that this was simply an acqui-hire to expand Facebook’s internal crypto team’s expertise.”
Crypto Winter Proven to be Good For Blockchain Developers
The crypto bear market, which is currently in its 14th month, has been difficult even for billionaire investors like Mike Novogratz.
Previously, Novogratz said:
“2017 was just fun, it was almost stupid. [But] this year has been challenging. It sucks to build a business in a bear market.”
But, blockchain developers have seen their worth increase substantially in the past year. Most experienced developers in the space have been averaging an income of around $170,000.
Especially in countries like the U.S. and Switzerland, senior developers earn around $15,000 a month with various perks and incentive programs.
“The reasons are: 1) highly skilled blockchain-experienced devs are very hard to find, and 2) Switzerland is well known to be one of the most expensive countries on earth,” said Thomas Bertani, CEO at a Switzerland-based cryptocurrency company.
As the valuation of crypto projects declined by more 90 to 99 percent against the U.S. dollar, startups have started to explore acqui-hire opportunities, unable to sustain large development teams due to the lack of capital during a correction.
In mid-December, Barry Silbert, the CEO of Digital Currency Group, a major venture capital firm in the cryptocurrency space, stated that he has seen deals fall apart because of market conditions.
Both venture capital firms and individual investors have lost confidence in the short-term performance of the cryptocurrency market, creating a more difficult environment for startups to raise money.
“We’ve seen half a dozen fundraising deals fall apart over the past month after the lead pulled out. All is not well in crypto VC investor land Good time to remind founders that a signed term sheet does not equal cash in the bank.”
Industry executives including ShapeShift CEO Erik Voorhees were taken aback by the troubling trend given that venture capital firms are known to invest with long-term investment strategies.
The VCs disappear when markets are down, and flood back in when markets are up. Are they not supposed to be the smart money? Their investing instincts seem little better than the Coors drinkin’ taxi driver all excited about Tron three weeks before the bubble pops. https://t.co/8YTcim5iKQ
— Erik Voorhees (@ErikVoorhees) December 13, 2018
Regardless of the state of venture capital in the cryptocurrency sector, the reality is that it has become challenging for startups and blockchain projects to retain talent. Consequently, large-scale conglomerates have started to pick up more talent from startups.
Bad or Good Trend?
For startups and emerging blockchain projects, the crypto winter has proven to be uneasy to deal with. For developers, lucrative offers from large-scale conglomerates have started to emerge.
In the long run, strategists foresee the cryptocurrency sector ultimately recovering and blockchain developers moving back to the crypto space.
But, it may take a while for the market to recover and until it does, startups are expected to continuously struggle which could lead to more high-profile acqui-hire deals in the near-term.
Featured Photo by Alysa Bajenaru on Unsplash