Bitwise Asset Management has reduced its workforce by approximately 14%, lowering headcount from roughly 180 to about 155 employees, the San Francisco-based firm confirmed to Bloomberg.

CEO Hunter Horsley framed the layoffs against a longer trajectory, telling the outlet that even after the reductions, the remaining workforce is still the largest in the company's eight-year history. He said he expects growth to continue as cryptocurrency becomes further integrated into the broader economy.

According to its website, Bitwise manages approximately $9 billion in client assets across more than 70 investment products, including Bitcoin and other ETFs, separately managed accounts, private funds, hedge fund strategies, and staking offerings. The firm was among the eleven issuers that launched U.S. spot Bitcoin ETFs in January 2024 after SEC approval, a milestone that had fueled hiring across the crypto asset management sector.

A Concentrating ETF Market

The staff reductions come amid a Bitcoin ETF category that has concentrated sharply. U.S. spot Bitcoin ETFs now hold approximately $77.5 billion in net assets, according to SoSoValue. BlackRock's IBIT accounts for roughly $47.3 billion and Fidelity's FBTC for another $10.9 billion. Bitwise's fund holds approximately $2.3 billion, representing under 3% of the total. Because ETF revenue scales with assets under management, the gap between top-tier issuers and smaller competitors such as Bitwise translates directly into uneven cost coverage — a structural pressure that intensifies when asset prices decline.

Bitcoin has fallen close to 50% from the record it set in October 2025, trading around $64,000 in a slump that has now persisted for approximately 10 months.

Broader Industry Contraction

Bitwise joins a growing roster of crypto firms trimming staff. Coinbase reduced its workforce by 14% in May, with CEO Brian Armstrong citing both market conditions and the pace at which AI has transformed how the company operates. Prime broker FalconX cut about 10% of its staff at the beginning of August, letting go of roughly half its Singapore office and withdrawing a license application in the city-state to focus on derivatives.

Two exchanges have gone further, shutting down entirely. BitMEX, which invented the perpetual swap in 2016, announced last month it will close on September 23 after more than 11 years of operation. BitMart followed days later, winding down a nine-year-old platform and sending its token lower.

Retail Capital Rotates Elsewhere

Retail investors who once propelled the crypto market are increasingly shifting toward sports-betting platforms and AI-related stocks. CoinGecko's second-quarter report found that notional volume on prediction markets rose 48.7% to a record $113.8 billion over the three-month period. Over the same timeframe, spot volume across the ten largest centralized exchanges fell 27.9% to $1.95 trillion, and total crypto market capitalization declined 12.6%.

Barclays analysts have described prediction markets as "retail's shiny new toy." A Wintermute report drawing on JPMorgan data found speculative capital rotating steadily into equities since late 2024.

Bitwise Executives Remain Upbeat

Despite the layoffs, Bitwise executives maintain an optimistic outlook. Chief Investment Officer Matt Hougan told Bloomberg Television this week that the market may be at the bottom of its crypto winter. He also argued that the Coldcard exploit, which has drained more than $100 million from self-custody wallets, strengthens the case for holding Bitcoin through an ETF rather than self-custody. Whether ETF inflows — a key demand-side metric tracked since the January 2024 launches — recover in the coming months will be one signal of whether that call is well-founded.