The Crypto Cut: Affirm Bids Farewell to Its Cryptocurrency Program
Max Levchin, the big cheese over at Affirm, dropped a bombshell on February 8 – they’re putting their crypto initiative on ice. Why, you ask? Well, Levchin pointed to a one-two punch of economic uncertainty and a need to trim the financial sails. Pause that celebratory Bitcoin party, folks!
What’s the Reason Behind the Shutdown?
In a heart-to-heart with shareholders, Levchin outlined that they’re all about playing it safe during this rollercoaster of a macroeconomic climate. With consumer spending reportedly cooling off, the Affirm Crypto Program will officially close by the end of March. And of course, a 19% workforce reduction is part of this strategic spring cleaning.
Decisions, Decisions: Levchin’s Take
Levchin candidly took some heat, admitting his slow reactions to Federal Reserve actions were part of the problem. When the Fed decided to tighten the financial belt last year, it impacted consumer spending and jacked up borrowing costs for Affirm, making the company reassess its crypto ambitions.
The Program and Its Features: A Quick Recap
Introduced in 2021, right when crypto was riding high, the Affirm Crypto Program allowed users to accumulate Bitcoin. Users could set up a system where interest from their savings was transformed into Bitcoin. Sounds cool, right? Too bad it has to go!
The Final Countdown: What Happens Next?
Mark your calendars! Affirm’s users will find their ability to purchase Bitcoin ending on March 2, 2023. Any Bitcoin still in user accounts when the program ends will be sold off, with proceeds landing safely back in their Affirm Savings account. So, if you’re a crypto enthusiast, it’s probably time to panic—well, at least act quickly!
The Bigger Picture: Layoffs and Stock Impact
While Affirm’s tech vision is taking a hit, it’s part of a broader trend seen across the fintech sector, with many firms scaling back in response to economic pressures. Around 500 employees, out of approximately 2,593, may be feeling the brunt of these cuts after Affirm’s latest statement. As for Affirm’s stock (ticker: AFRM), it saw a 19.1% drop in after-hours trading following this news. Ouch!
