Less than a year after opening an office in Chicago, Coinbase (NASDAQ: COIN) has now had to shut it down. The location had been expected to help the company expand its portfolio of cryptocurrency trading products and take advantage of the city’s financial expertise. Despite the recent Bitcoin market rally, Coinbase has determined that it cannot hold onto the office and around 30 engineers are now polishing their resumes.
In a statement from Tuesday, Coinbase indicated that the office would close as the company reviewed its plans for a new “matching engine” product that had been conceptualized for high-frequency trading. It stated, “We have made the difficult decision to consolidate the matching engine efforts and thus wind down the matching engine team in Chicago. We will look to relocate a small number of Chicago-based matching engine employees to San Francisco.”
Coinbase had increased its workforce to about 800 over the course of 2018 in an effort to ramp up operations. The amount was triple what it had seen a year earlier, but the “crypto winter” proved to be too much and the company continued to see a decline in trading volumes.
Always ready to find a positive spin, Coinbase said that the Chicago office closure, while unfortunate, is not the end of the world. The company is looking to add employees to other business segments and states that high-frequency trading simply became irrelevant at this time. Instead, Coinbase indicates that it will focus on its custody services and over-the-counter trading products, both of which it has introduced over the past 12 months.
Coinbase won’t totally give up on Chicago, at least not yet. It plans on keeping a small remote sales force in the Windy City as it works to expand into New York, Portland and London. The company “only” saw revenue of around $520 million last year, which was about 60% less than analysts had predicted before the crypto winter grabbed hold.
The closure of the Chicago office comes only a month after the location had been praised by Coinbase, making the quickness of the closure startling. According to builtinchicago.org, just a month ago, the office had been in the “final stages of building a new exchange infrastructure.” It added, “…[T]he team has been so successful that the company is expanding the size and scope of its Chicago engineering office.”
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