How the crypto crash brought bad karma to a New York yoga studio

New Vibe Yoga in New York’s East Village is a near-perfect yoga studio. The scent of peppermint and eucalyptus bathes the top-floor practice room, with its exposed brick walls and roaring log fire, in a warm and tranquil haze. But although the owner, Alex Schatzberg, has created an oasis of calm for his customers, he himself is struggling with financial worries.

The number of mats that fall onto the hardwood floors is barely enough to keep Schatzberg’s business going. And last year, the lower Manhattan studio suffered a financial hit from an unlikely source: the crypto crash.

“Crypto was like my life raft. . . and her party is over,” Schatzberg told me when I visited the studio during a recent reporting trip to New York. The random revelation I’m writing about crypto prompted him to launch a 30-minute story showing how far the unlikely ripples of the digital token crash have spread.

The first victims of the crypto industry collapse were the millions of investors who poured their money into digital assets, as well as the former crypto titans themselves, whose fortunes were wiped out overnight. But an eclectic array of businesses that thrived during crypto’s rise — from nightclubs in Miami to luxury hotels in the Bahamas — are also suffering from the contraction.

Schatzberg’s yoga studio, which opened in its current location in 2017, is just part of its store, which occupies three floors of a townhouse on St. Marks Place — described by writer Ada Calhoun as “the hippest street in America.” . He also rents out rooms on Airbnb and offers larger rooms for event bookings. While yogis have been slow to return to face-to-face classes in the wake of the pandemic, Airbnb has become the mainstay of Schatzberg’s revenue thanks to its accommodation’s popularity with a new group of wealthy travelers.

The values ​​of cryptocurrencies boomed tenfold from the outbreak of Covid to its peak in November 2021, giving many traders a temporary boom in wealth. Most of Schatzberg’s bookings came from the crypto industry. “I was really expensive,” he said. “Those were the people who had the money.”

The new-age vibe and the opportunity for a few short breaks between trades appealed to this clientele, and demand surged among crypto adherents who frequented the city for work or digital asset conferences — even during the pandemic were held in person. Predominantly young and newly wealthy, they practiced yoga and then spent their days in the ground-floor rooms doing business or watching YouTube videos about token trading, Schatzberg recalls.

But the boom didn’t last long. Starting last May, the crypto sector suffered a series of explosions, and much of its apparent wealth evaporated as quickly as it appeared. The total value of digital currencies has fallen by around two-thirds since its peak.

Financial analysts attribute crypto’s decline to the same fundamental shift in the global economic order that is affecting other relatively speculative corners of the financial markets, such as cryptocurrencies. B. Big Tech. To the galloping inflation central banks have drastically reversed a decade of easy monetary policy, pushing the cost of borrowing to its highest level in more than a decade. Many companies feel the crisis.

As the tide of easy money has ebbed and bookings have dried up, Schatzberg has turned to the yoga business — but with fewer office workers now making the trip to Manhattan, attendance is still just a quarter of pre-pandemic levels. Like other New York service and hospitality companies that benefited from office workers, Schatzberg is facing a slow and partial recovery from Covid alongside rising costs and the curveball of the crypto meltdown.

But with devotional songs and Indian flute music pouring out of the studio speakers, Schatzberg insists he will find a way to survive the financial pressures and return to profitability. To do this, he relies on a currency far more tangible than that traded by his former clients. “New York lives on the dollar,” he says. “If you’re not rushing, then get out.”

joshua.oliver@ft.com