Crypto exchange Coinbase is laying off 18% of its employees as the digital currency market continues to crumble.

CEO Brian Armstrong said in an open letter Tuesday that the “difficult decision” to lay off about 1,000 employees was made to ensure “we stay healthy during this economic downturn.” The exchange has more than 4,900 employees, according to its website.

Armstrong warned of a looming economic downturn that could extend the latest bear market for crypto.

“We appear to be entering a recession after a 10-plus year economic boom,” Armstrong wrote. “A recession could lead to another crypto winter, and could last for an extended period.”

Although Armstrong said it’s difficult to predict future economic conditions, the company plans “for the worst so we can operate the business through any environment.”

Bitcoin meltdown deepens: Price falls; big lender halts withdrawals, swaps, transfers

Coinbase’s market value has imploded as investors continue to sell off crypto, bailing out of risky assets in anticipation of sharp increases in interest rates to tackle inflation.

Bitcoin hit an all-time high of $69,000 in November 2021. Since then, the world’s most valuable cryptocurrency has lost two-thirds of its value, tumbling below $23,000 Tuesday. It has lost about 25% of its value since Friday.

Meanwhile, Coinbase’s stock is down about 80% this year and 85% since its initial public offering in April 2021. The company, which was once worth nearly $100 billion, is now worth less than $12 billion.

In his blog post, Armstrong admitted that Coinbase “grew too quickly” as crypto trading boomed in early 2021.

“While we tried our best to get this just right, in this case it is now clear to me that we over-hired,” he said.

Other market players are struggling too. The Celsius Network, a major lender of cryptocurrencies, said Monday that it was suspending all withdrawals and transactions because of “extreme market conditions.”

— CNN Business’ Anna Cooban contributed to this report.

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