Bitwise Layoffs Show How Crypto Downturn Hits Asset Managers

Bitwise Asset Management cut roughly 14% of its workforce, eliminating about 25 positions and reducing its global team from around 180 to 155 employees. CEO Hunter Horsley confirmed the restructuring in an email to The Block, saying the company expects to resume hiring as adoption expands. The layoffs come at a time when crypto prices remain under pressure.

The economics behind the move are straightforward. Asset managers earn most of their revenue from fees charged as a percentage of assets under management. When Bitcoin, Ethereum and other holdings decline in value, the asset base shrinks automatically. Revenue drops even if no client withdraws a dollar.

Bitwise's flagship Bitwise 10 Crypto Index ETF shows the effect. Its net assets fell about 31% during the first seven months of 2026, according to Financial Times market data. BITW's assets stood at roughly $574 million as of July 31. A one-third decline in the asset base translates directly into lower fee revenue before accounting for any inflows or outflows.

Employee costs do not shrink the same way. Salaries, benefits, compliance teams and technology spending stay flat. That creates what analysts call reverse operating leverage. During bull markets, rising crypto prices expand fee income faster than headcount. During prolonged declines, the cost base built for higher AUM becomes a drag.

Bitwise's response is not just cost-cutting. Earlier this year it acquired Chorus One, an institutional staking provider with more than $2.2 billion in staked assets. Chorus One became part of Bitwise Onchain Solutions, pushing the firm beyond investment products into infrastructure that generates staking rewards. Staking revenue behaves differently from a simple management fee. It is less directly tied to token price movements, at least in the short term.

Horsley said the remaining workforce is still the largest in Bitwise's eight-year history and that the firm expects to grow again as crypto becomes more integrated into the global economy. The restructuring appears to be a targeted resizing of fixed costs, not a retreat from the business.

The broader industry is showing similar patterns. Coinbase cut roughly 700 positions, or 14% of its workforce, in May, as trading volumes slumped. Gemini announced plans to eliminate as many as 200 jobs, about one-quarter of its workforce, while pulling out of several international markets. Polygon Labs, Robinhood, BitGo and the Ethereum Foundation have also trimmed staff in recent months.

The mechanisms differ. Exchanges suffer when customers trade less. Asset managers suffer when the assets they manage become less valuable. Both models remain highly sensitive to the crypto cycle.

Bitwise's product lineup runs from ETFs to separately managed accounts. It also offers private funds and staking products. The company's website lists more than 70 offerings globally. The Chorus One acquisition is the most strategic move because it gives Bitwise a revenue stream that depends less on token appreciation. If onchain services can generate recurring institutional income even when prices are weak, the firm may reduce its sensitivity to the cycle over time.

For now, the layoffs show that diversification has not eliminated that sensitivity. The next evidence will come from client flows and the growth of the staking business. Those numbers will determine whether the 14% reduction is a temporary adjustment or the start of a deeper shift in how crypto asset managers structure their costs.