Why is Bitwise still launching new products after shutting down 8 ETFs and laying off 14% of its staff?

After client assets dropped from over $15 billion to $11 billion, even giants are tightening their belts.

Written by: ChandlerZ, Foresight News

According to a report by Bloomberg on August 12, cryptocurrency asset management firm Bitwise has laid off approximately 14% of its employees. Bitwise later confirmed via email that the staff count has decreased from about 180 to around 155, which translates to a reduction of approximately 25 positions based on these estimates. The company did not disclose the specific departments affected, compensation plans, or subsequent adjustment strategies.

Bitwise CEO Hunter Horsley stated in response that the adjusted team remains the largest in the company's eight-year history and expects the company to continue growing as cryptocurrency assets integrate into the global economy. The company remains optimistic about long-term growth, but current personnel and product configurations have begun to tighten.

This year, several cryptocurrency companies have also been reducing their teams. Coinbase laid off about 700 employees in May, accounting for 14% of its global workforce, citing market volatility, cost control, and organizational restructuring due to AI; on-chain data platform Dune also laid off 25% of its staff in the same month, with its CEO mentioning AI efficiency; BitGo laid off 15% of its workforce in June, focusing resources on security, trading, stablecoins, settlements, and AI infrastructure. Bitwise has not disclosed the specific reasons for this round of layoffs, nor has it attributed them to AI. It remains unclear whether there is an organizational correlation between the layoffs and product adjustments.

Client assets decreased by at least $4 billion, leading to the exit of eight ETFs

Before the personnel adjustments, Bitwise had already disclosed a significant change in client asset metrics. On February 3, Bitwise announced that client assets exceeded $15 billion; another announcement on May 1 indicated that as of April 1, client assets were $11 billion. Based on the figures disclosed by the company, the discrepancy amounts to at least $4 billion. Bitwise did not clarify how much of this change was due to price fluctuations, subscriptions and redemptions, or the scope of statistics.

Client assets are a metric influenced by both market prices and capital flows; price increases or decreases can change asset valuations, while client subscriptions and redemptions can alter managed shares, and new or terminated products may also affect the statistical scope. The data from the two points in time cannot separate the contributions of these factors. Bitwise did not disclose relevant breakdowns, making it impossible to directly equate the decrease of at least $4 billion with net client redemptions.

Bitwise's business includes ETFs, private funds, separately managed accounts, staking, and on-chain investment products, with varying fee structures and billing bases, and the company has not disclosed the composition changes of various assets in the two statistics. The client asset base disclosed by Bitwise has significantly narrowed between the two points in time, putting pressure on the scale of chargeable assets in asset management.

The product exits occurred almost simultaneously. 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 of which ceased trading and completed liquidation in May. On June 30, the board again decided to liquidate six options income ETFs, which were linked to Coinbase, MARA, Strategy, GameStop, Circle, and Ethereum, with the related funds ceasing trading and distributing liquidation payments 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, while the latter six relied on single stocks or Ethereum-related options for income. The investment logic of the eight products differs, but they all require ongoing trading, compliance, valuation, and information disclosure support. Liquidation can reduce the number of products that need to be maintained, but the revenue impact still depends on the asset scale and fee rates of each fund before liquidation.

Old products exit, new resources flow into staking and tokenized funds

During the exit of the eight ETFs, Bitwise continued to increase products in other directions. In April, the company launched an Avalanche ETP with internal staking arrangements in the European market; in May, the Hyperliquid ETF officially launched; in June, the company took over the Crypto Carry Fund from Superstate, which has over $267 million in assets, entering the field of tokenized fund management.

These new products will also generate needs for custody, staking, compliance, and distribution, and changes in product direction cannot be directly equated with a decrease in overall operational burden. It indicates that the company is still willing to allocate resources for new tracks, allowing layoffs and product expansion to appear simultaneously on a business list.

In an announcement released on June 30, Bitwise stated that it has 70 investment products, serving over 5,500 private wealth management teams, registered investment advisors, and family offices, and collaborating with more than 20 banks and brokerage firms. The number of products means the company needs to continuously bear operational work such as compliance, custody, trading support, information disclosure, and customer service. After reducing the team by about one-seventh, the product structure will directly affect the complexity of the business that the remaining personnel need to maintain.

Observing the concentrated liquidation of the eight ETFs alongside the new products launched during the same period, the Web3-themed funds and options income strategies built around single assets exited, while tokenized products that directly track underlying cryptocurrency assets, provide staking income, and move fund shares on-chain continue to receive investments.

After the staff count decreased from 180 to 155, the remaining products will be managed by a smaller team. Bitwise has not specified which positions are related to the product adjustments and has not disclosed any one-time layoff costs.

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