ConsenSys Puts ETH Price Worries Back in Focus with 20% Jobs Cut

• Prominent Ethereum contributor ConsenSys has made a decision to downsize.
• The firm cited regulatory woes and a desire to better compete as factors guiding the decision.
• Market observers suspect there is more to the move.

While crypto market leader Bitcoin (BTC) appears to be waxing strong, clinching and trading near new all-time highs amid growing institutional interest and changing macroeconomic conditions , second-place Ethereum (ETH) has failed to impress with subpar year-to-date (YTD) gains.

Amid the changing dynamics of the Ethereum network, many have been forced to question the long-term viability of ETH as an investment. These concerns have again come into focus following a significant corporate decision from one of the protocol’s biggest supporters.

ConsenSys Cuts Over 160 Jobs

Prominent Ethereum contributor ConsenSys has made a decision to downsize. In a Tuesday, October 29 statement , ConsenSys CEO Joseph Lubin disclosed that the firm was cutting 20% of its workforce, representing over 160 jobs.

Explaining the decision, Lubin cited everything from tough macroeconomic conditions to the firm’s legal battles with the SEC to a need to be more agile in the ever evolving crypto landscape.

"Today, we are making the tough but prudent decision to streamline our operations to position Consensys for ongoing rapid innovation, long-term sustainability under possibly volatile scenarios, and continued leadership in the web3 space," the ConsenSys founder asserted.

Despite the many reasons offered by Lubin, several market observers have suggested that there may be more behind the move.

Ethereum (ETH) Price Struggles To Blame?

Several observers have argued that ConsenSys’ recent move can likely be linked to ETH’s price struggles.

These sentiments arise as ConsenSys’ core businesses, including MetaMask and the Layer 2 chain , Linea, are centered around Ethereum, which appears to be losing ground to competitors like Solana in recent times. At the same time, the company is renowned for sponsoring various operations with the personal ETH holdings of Lubin, who was also part of the Ethereum founding team and received a substantial token allocation at the project’s launch.

Reacting to the ConsenSys’ reasons for downsizing, prominent crypto researcher known only as A. Fraser posted :

“AKA ‘Ethereum is plummeting and we’re running out of runway.'”

Expressing a similar sentiment, Ethereum validator Chase Wright quipped “Blob fee market hits hard,” referring to the change in network dynamics that has been blamed for ETH’s recent market underperformance. The blob fee market has made transactions on Layer 2 chains largely free, at the cost of revenue to the base layer and token burns to keep the asset deflationary.

Also chiming in, prominent crypto lawyer Gabriel Shapiro contended that the ConsenSys move should be a rallying cry to Ethereum holders.

“sucks to see this. imo it’s another reason why Ethereum community can’t be complacent. win every battle, fight on the front lines (X, not farcaster), market hard, market to everyone, counter FUD , and yes ETH price does matter,” he wrote.

The reactions to ConsenSys’ job cuts offer yet another glimpse into the worrying state of sentiment in the Ethereum community. But it may not be all gloom and doom for the asset.

Ethereum Recovery in the Cards?

Over the past week, analysts have sounded increasingly positive about ETH . For one, veteran commodities trader Peter Brandt asserted that the asset offered the most interesting price action setup, as it appeared to have broken out of an inverse head and shoulders pattern on its daily candle chart.

Citing a similar chart pattern, prominent crypto trader IncomeSharks contended that the asset could rally to the $3,000 price point soon.

At the time of writing, ETH is trading just above the $2,600 price point, representing a 2% gain in the past 24 hours as Bitcoin flirts with its all-time high near the $74,000 price point.

On the Flipside 

• Following the recent layoffs, ConsenSys still employs over 600 people, according to a Fortune report .
• ConsenSys has promised its sacked employees substantial support. This support includes severance packages, ample time to exercise stock options, extended healthcare, and career support.

Why This Matters

ConsenSys, valued at over $7 billion, is one of the Ethereum network’s biggest supporters. The reactions to the recent layoffs highlight how many perceive the firm’s fortunes to be closely tied to the success of the popular blockchain network.

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