last new year’s eve. This was the turning point that marked the beginning of the decline. Those were the days when the S&P 500, which is the stock market index of the 500 largest companies in the United States and best represents the real situation of the market, peaked before it started to fall.

This index, which is monopolized by big technology companies, is one of the first signs that something is wrong in this sector. A market correction that has left the world’s 10 largest tech companies by market capitalization in the red so far this year. Both American, Chinese and South Korean: none of them survived this disaster.

Drops of up to 75% so far this year

The drop ranges from 14% of Samsung, who held out better in the first months, to 43% left by Nvidia, which managed to commendably reach the top 10. It still trades above Samsung at under $80 billion, but the gap has narrowed again. The three leaders resisted slightly better than the others, but Apple lost the lead It was among the most valuable companies in the world, once again falling to the oil company Saudi Aramco.

Other tech companies listed at lower magnitudes have not evolved better either.. In fact, for many it was even worse. In the selection of tech companies outside of these top 10, the very strong drops of PayPal, Netflix, Spotify, Shopify or a Coinbase stand out – 75% down in a few months) – which has also been subject to another crisis, cryptocurrencies, which has been going on for months. chain falls and dragged the most famous exchange office.

And other companies such as Zoom (-85% from maximum) or Peloton (-91%), powered by quarantines and remote work, have also experienced very strong declines as a return to normalcy after the pandemic. Whatever COVID gave them, the vaccine took.

A condition that causes what may look like an anomaly in the five-year continuous growth trajectory: Big tech companies that can’t hire the professionals they need or decide to delay hiring. known as stop hiring. Facebook was alarmed a few days ago by announcing that they would need 10,000 new workers to build their metaverse, but could not afford to hire them. Three days later, Uber’s CEO referred to the hiring as “a privilege”. Netflix also prepares for layoffs and adopts a rhetoric that encourages voluntary layoffs.

Layoffs and venture capital decline in startups

If large companies are slowing or pausing new hires, smaller companies and to start It’s time for mass layoffs. layoffsA layoff tracker for the American tech industry, it adds up to the thousands of layoffs that have accumulated in the 78th year. to start until this year.

Some of the most notable: Carvana (and their layoff via Zoom), Zwift, Reef, Vroom, Send, Doma. Even Cameo, a platform used to buy personalized videos for celebrities and often sarcastically celebrate a humiliated celebrity’s birthday, discovered it didn’t have a market to support 400 employees. In any case, the layoff figures are unprecedented since the first months of the pandemic. Now that normality is returning.

It is also the case with venture capital, which is increasingly cautious in its actions and turns off the tap, especially at the expense of its own. companies for growth of users postponing income worry, fixed every fifteen years. The results: Twice the number of tech companies announcing layoffs, 80% fewer IPOs than a year ago to startand a 10% drop in venture capital financing (which will be much higher at the end of the quarter). Softbank CEO Masayoshi Son to start It will be reduced between 50% and 75%.

The reasons: rising inflation on both sides of the pond, one country with 7,000 nuclear warheads invading another and threatening a few more, and interest rates soaring years later. In addition to all of the above, the stock market crashes. Too much uncertainty, bad indicators and worse omens To be optimistic with investments. Europe tends to react with some delay to moves in the United States, so we may see similar scenarios of layoffs and frozen hirings in the coming months.

crypto crash

The pandemic brought several economic decisions, one of the most influential was that the US began to print more dollars than ever before, thus reaching 4,000 billion (yes, billions) in circulation in January 2020, reaching 20,000 billion by the end of 2021. In other words, 80% of the dollar in circulation was printed in the last two years. A behavior lauded by modern monetary theory that believes monetizing the public deficit improves economic well-being, but often winging it until inflation becomes too high to ignore. How was it.

One of the arguments in favor of cryptocurrencies, especially Bitcoin as it is deflationary, was precisely this: acts as a value reserve in high inflation scenarios that devalue the currency. Although it is not known what the price will be in dollars or euros after a while, this was not the case at this initial stage when inflation started to rise. A million, a few, or the current thirty thousand. Heads, tails and song.

Bitcoin peaked in November. 67,000 dollars. Around 30,000 today. That’s far more than any year’s high before 2021, but down more than 50% in just a few months.

In the cryptocurrency market, there are currencies that go quietly and currencies whose collapse is jingling all signs. wallets. The latter is what has happened in recent weeks with the stable cryptocurrency Terra and Luna. token brother, hence the satellite name. On May 4, a month was worth $85. Its value today is 400,000 times less. This is not a hyperbola.

Bad news for bearish investors but also for most of the market for the results this can have. According to the ECB, a few weeks ago the cryptocurrency market cap was over €2 trillion. That’s double what was backed up by junk mortgages in 2007, before everything exploded.

We come from a bull market of both cryptocurrencies and tech stocks, and venture capital is happily watering its coffers. to start cash flow was not a present but a future concern. Now that cryptocurrencies have dropped from highs by 50% to 80% (some disappeared in a matter of days), tech stocks are far from their heyday, and emerging companies are unable to find financing without the liquidity that would have been high school until recently. Spring in the northern hemisphere brought winter for an entire industry.