A cryptocurrency crash and the beginning of a new so-called “crypto winter” has left many companies in the industry facing a liquidity crisis.
Artur Widak | Nurphoto | beautiful pictures
Not even Google immune to crypto winter.
In the alphabet of third quarter earnings call On Tuesday, Philipp Schindler, Google’s chief business officer, blamed slowing revenue growth in part on a drop in ad spend by crypto companies and other financial firms.
“During the third quarter, we saw a decrease in spend by certain advertisers in certain areas of the search space,” said Schindler. “For example, in financial services, we’ve seen declines in the insurance, lending, mortgage, and crypto sub-categories.”
Google’s overall ad growth of 6% for the quarter was the lowest for any period since 2013, minus a quarter at the start of the pandemic. YouTube ad revenue drops from a year earlier. CEO Sundar Pichai said the “challenging macro environment” is having an impact on Google’s advertising business.
Schindler referenced the crypto pullback twice, but he did not provide any further colors or specifics. The crypto industry was devastated in 2022, as investors fled risky assets and sold off the digital currency and related stocks they had auctioned off in the previous few years. there.
Bitcoin and ethereum both have lost nearly 60% of their value this year. Cryptocurrency Exchange Coinbase, which goes public in 2021, is down more than 70%. Meanwhile, the industry has been beset by bankruptcies as hedge funds and lenders have seen their liquidity depleted and, in some cases, forced into default. C Network, Voyager Digital and Three Arrows Capital are some of the more notable names that have been forced to join bankrupt.
Elsewhere, companies have downsized. Blockchain.com laid off 25% of employees in July, Coinbase 18% cut its workforce last month, and Crypto.com has made two rounds of layoffs this year.
For Google, there is hope that the crypto sell-off is only a short-term turning point, as the company sees clear opportunities for future growth. Earlier this month, Google said it would rely on Coinbase to begin allowing customers to pay for cloud services with crypto in 2023. Additionally, Coinbase will migrate data-related applications to Google’s cloud infrastructure from Amazon Web Services. on which the company has relied for many years.
– Jennifer Elias and Jordan Novet of CNBC contributed to this report.
