Gemini Stock: Winklevoss Crypto Bet Stumbles

Shares in the cryptocurrency brokerage Gemini Space Station (NASDAQ: GEMI) have experienced a tumultuous beginning after their much-anticipated debut on Friday, September 12. The exchange set its IPO price at $28 per share, generating hundreds of millions of dollars while doing so. Although trading commenced at $37 on the initial day, the stock has subsequently dropped to $26 per share, falling below the IPO price, which gives the company a market capitalization of $3 billion. On Wednesday, the Federal Reserve reduced its benchmark interest rate by 0.25 percentage points, marking its first cut since December, with Fed officials predicting two additional rate reductions in 2025 and only one in 2026—a careful stance that may have disappointed markets and put pressure on risk assets, such as newly listed technology and cryptocurrency firms. So, does the sell-off make the stock worth considering?

Institutional Positioning in Crypto

Gemini has established itself as one of the more institutional-grade participants in the cryptocurrency sector, offering a diverse range of products beyond its main exchange. Co-founded by Cameron and Tyler Winklevoss – known for their legal battle with Mark Zuckerberg regarding Facebook’s origins – the company provides a U.S. dollar-backed stablecoin, a crypto rewards credit card, and an NFT studio. Most critically, Gemini offers digital asset custody services, catering to institutional investors that need secure, regulated infrastructure for holding cryptocurrency at scale. According to its IPO prospectus, Gemini oversees more than $21 billion in assets and caters to approximately 10,000 institutions worldwide.

This positioning – which emphasizes regulation, compliance, and infrastructure – has established the exchange’s reputation as distinct from its less regulated counterparts. Nevertheless, Gemini’s business model continues to depend heavily on a familiar lever for cryptocurrency exchanges: transaction fees on volume-based trades. Although the company has successfully expanded into adjacent services, generating custody fees, credit card interchange fees, and treasury yields from its stablecoin, trading still constitutes the majority of its revenue. This dependency establishes a direct correlation between Gemini’s financial performance and the unpredictable fluctuations of cryptocurrency trading activity. Separately, XRP Price To Hit $10 In October?

Growth Slowdown, Profitability Concerns, Steep Valuation

Profitability presents a significant hurdle. In 2024, Gemini recorded considerable losses, and in the first half of 2025, those losses escalated even further. Net losses amounted to $282 million for the first half of 2025, bringing the trailing 12-month total to about $400 million, sharply higher than $159 million in 2024.

Valuation is another contentious issue. At its current market capitalization, Gemini trades at a price-to-sales ratio of approximately 21x trailing revenue, deemed high even within the fast-growing technology sector. For comparison, more established fintech and cryptocurrency companies typically trade at significantly lower multiples. Coinbase trades at around 12x trailing revenue. This suggests that investors are factoring in nearly flawless execution and rapid growth expectations that may be challenging to realize. This leaves investors with little room for error.

The top-line growth narrative is also beginning to show signs of fatigue. While revenues in 2024 increased by about 40% to $136 million, the momentum has sharply diminished. In the first half of 2025, revenues decreased compared to the same period a year earlier, raising alarm for a company seeking to justify such a premium valuation in a booming cryptocurrency market. If revenue growth is stagnating even as losses grow, the fundamental narrative becomes increasingly difficult to defend.

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