(Fortune) - If you want a job in the crypto industry, now is not a great time to look. A new report from the Brookings Institution found that after a monstrous 2021 and early 2022, open positions at crypto companies in the U.S. have fallen in droves, with major cities seeing a drop as high as 80%.
The crypto industry has long been defined by extreme boom-and-bust cycles, but the past few years have proven particularly dramatic, with Bitcoin rising to nearly $70,000 in November 2021 before the sector saw a calamitous decline thanks to the collapse of high-profile projects like FTX and ensuing enforcement actions from government agencies.
During the boom, crypto advocates portrayed the digital asset industry as an area for economic growth and opportunity. Local leaders from Texas to Florida sought to capitalize on the hype, with Miami Mayor Francis Suarez even launching his own ill-fated crypto token in an effort to portray the city as friendly to the industry.
The Brookings report—authored by Tonantzin Carmona, Mark Muro, and Sifan Liu—illustrates the dangers of the sector's volatility on job growth. Analyzing data from Crunchbase, the researchers found that the number of new startups emerging in the crypto space has fallen from a peak of 80 per month in January 2022 to just two in April 2023.
The decline mirrors the troubled times in the industry, which has seen crypto prices drop, prominent companies collapse, and sector leaders outed as scammers. Major U.S. cities from New York to Los Angeles attracted scores of crypto startups but open job listings have since dropped precipitously.
The Brookings researchers argue that the decline should present a cautionary tale to metro areas as they seek to attract "disruptive" technologies. "Despite some state and local governments’ efforts to attract crypto activity, few of the associated startups and jobs have been stable or sustainable," they write. Instead, many of the companies created investor losses and fraud cases for local law enforcement.
With the U.S. crypto industry still on uncertain regulatory ground, many firms have begun to look abroad to more welcoming jurisdictions. Coinbase, one of the few publicly listed crypto companies, and Gemini both launched offshore exchanges in early May, with Binance.US's future in the U.S. looking shaky following lawsuits from government agencies. Even in New York, one of the few U.S. states with a regulatory regime for crypto, firms have expressed their intention to move overseas amid stricter oversight.
Meanwhile, many investors are chasing the next hype cycle in artificial intelligence, with some venture firms signaling an interest in the sector, much to the chagrin of crypto diehards. A recent study from the crypto data aggregator CoinGecko found that search interest in "A.I. jobs" peaked four times higher than "crypto jobs" in June.
The Brookings researchers argue the data suggests why cities should focus on more "critical" technological sectors, such as biotech and energy. "The collapse of the crypto bubble in most, if not all, places ought to nudge local leaders toward other strategies for regional economic development," they write. "Not all emerging technologies are promising, no matter how much they are hyped."
This story was originally featured on Fortune.com.
By Leo Schwartz
