The downward slide of cryptocurrency over the last couple months has sent skittish investors into retreat mode, erased nearly $2 trillion in value from the overall market and is now trashing the employment rolls of digital currency exchanges.

The two most heavily traded digital tokens, Bitcoin and ethereum, saw modest gains over the last 24 hours but are still hovering near their lowest values in two years.

Bitcoin has dropped almost 30% in the last week, was trading around $22,172 per token Wednesday afternoon, according to CoinGecko, and has seen a precipitous plunge from its high of just about $68,000 per token last November.

Ethereum was listed at just over $1,217 per token Wednesday, has slid almost 34% in value in the last week and is far below its peak valuation of nearly $4,900 per token in November 2021.

Coinbase slashes workforce: One of the busiest U.S. crypto exchanges, San Francisco-based Coinbase, made a big splash when it went public in April 2021, earning a valuation around $100 billion. Its stock has been on a toboggan ride since last November and, at the end of regular trading on Wednesday, had a market capitalization of just over $12 billion.

Now the company, which mediates transactions for those looking to buy, sell, transfer or store over 100 different cryptocurrencies, is making drastic cuts to its workforce and, according to company leadership, is adjusting for what might be a protracted lull for digital tokens.

Over the last few weeks the company has evolved its staff-related announcements from an initial short-term hiring freeze to a moderate number of layoffs, but it’s now planning on cutting 18% of its staff (about 1,100 employees) and has canceled pending job offers.

Coinbase CEO Brian Armstrong pointed to a possible recession and a need to manage Coinbase’s burn rate and increase efficiency, according to CNBC. He also said the company grew “too quickly” during a bull market.

“We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period,” Armstrong said in an email to CNBC.

He added that past crypto winters have resulted in a significant decline in trading activity.

“While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment.”

Layoffs are crypto industry wide: In May, crypto firms Gemini Trust and Rain Financial joined Coinbase in announcing layoffs and hiring freezes, according to Fortune. Amid rising inflation rates and slowing demand, fintech companies across the board cut more jobs in May than in the first four months of 2022 combined. 

On Monday, two more crypto firms — BlockFi and — made similar announcements, with BlockFi CEO Zac Prince tweeting that the company will be “reducing (its) headcount by roughly 20%” and announcing it was laying off 260 employees, or 5% of its workforce, per Forbes.

Record inflation is a driver: Macro factors are contributing to the bearishness in the crypto markets, with rampant inflation continuing and the U.S. Federal Reserve expected to hike interest rates this week to control rising prices, according to CNBC.

Last week, U.S. indices sold off heavily, with the tech-heavy Nasdaq dropping sharply. Bitcoin and other cryptocurrencies have tended to correlate with stocks and other risk assets. When these indices fall, crypto drops as well.

“Since November 2021, sentiment has changed drastically given the Fed rate hikes and inflation management. We’re also potentially looking at a recession given the Fed may need to finally tackle the demand side to manage inflation,” Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, told CNBC earlier this week.

“All this points to the market not completely having bottomed and unless the Fed is able to take a breather, we’re probably not going to see bullishness return.”