The cryptocurrency sector has experienced a significant drop of nearly 50% in the number of new developers entering the field over the past year, according to Electric Capital’s Developer Report. This decline in newcomers highlights a shifting trend in the developer landscape, with long-term coders who have worked in the industry for over a year exhibiting higher commitment and productivity compared to those who have left.
As of June 1, the report estimates that there are approximately 21,300 active open source developers involved in the cryptocurrency ecosystem. However, this number represents a 22% decline since June 2022. It is important to note that the developers who have exited the industry within the past year are classified as “newcomers” who had less than a year of experience. Surprisingly, despite their departure, these newcomers were responsible for less than 20% of all code commits during the same period.
In contrast, long-term cryptocurrency developers, with more than a year of experience, accounted for over 80% of committed code. Around 7,700 newcomer developers have left the space since June 2022. On the other hand, emerging developers with up to two years of experience increased by 1,650, while established developers with over two years of experience in the cryptocurrency field increased by 150.
The decline in newcomer developers can be attributed to fewer coders exploring opportunities in the cryptocurrency sector. Additionally, the ongoing bear market in the broader cryptocurrency industry has further dampened interest among potential developers.
Analyzing the situation from a historical perspective, it becomes evident that developers who join during bear markets tend to leave the industry faster. This trend is not considered abnormal when considering cohort retention analysis starting from 2015.
Newcomer developers typically enter the cryptocurrency sector during market peaks. For instance, six months after the January 2018 market peak, newcomer developers dominated the industry by 70%. Similarly, following the November 2021 all-time high, they constituted 60% of developers in the subsequent six months. Conversely, emerging and established developers tend to take center stage when the cryptocurrency space enters a bear market.
In the latter half of 2022, widespread layoffs occurred in response to the challenging market conditions, resulting in downsizing across the cryptocurrency industry. However, from February 2023 onwards, there has been a decline in layoffs, indicating some stabilization within the job market.
The changing dynamics of developer participation in the cryptocurrency sector reflect the influence of market conditions and highlight the need for continuous adaptation within the industry. These trends offer insights into the evolving nature of employment opportunities and the shifting expectations for developers in the cryptocurrency space.