Original Article Title: "Gemini Plummets After Soaring on First Day of Trading, Following Circle, the Cryptocurrency Concept IPO Craze Cools Down"

Original Author: jk

Original Source: Odaily Planet Daily

The cryptocurrency exchange Gemini officially went public on Nasdaq on September 12, with the stock symbol GEMI. This marked the realization of the exchange platform founded by the Winklevoss twins' dream of going public after many years. However, the initial market enthusiasm was quickly cooled by the reality of financial data. The stock price quickly fell after experiencing a frenzy of gains on the opening day, exposing that the company's fundamentals did not actually win the confidence of retail stock investors.

The Long Road to Listing: From $71 Billion Valuation to IPO

Gemini's path to listing has been full of twists and turns. The cryptocurrency exchange founded by Cameron and Tyler Winklevoss in 2014 started preparing for its IPO several years ago. Reported to have spent about three years preparing for the IPO, the company had to postpone its listing plan in mid-2024 and April 2025 twice due to unfavorable market conditions and a weak IPO environment.

During the cryptocurrency bull market at the end of 2021, Gemini had obtained a valuation of $71 billion in a financing round. However, the cryptocurrency market crash in 2022, including the collapse of its Earn product and the bankruptcy of partner Genesis, forced Gemini into a contraction mode. It was not until mid-2025 that the company restarted its listing plans as market sentiment improved and the regulatory environment became clearer.

In June of this year, Gemini secretly submitted an IPO application to the SEC, joining the cryptocurrency companies' listing craze such as Circle and Bullish. After months of preparation and roadshows, the company chose to list on Nasdaq through a traditional IPO.

Compared to others, Gemini's listing did not cause much of a stir in the cryptocurrency world; firstly because of its focus on the U.S. domestic market, as the founding brothers were guests in a crypto-related event involving former President Trump. Additionally, Gemini's listing style leans more towards a "quiet entry into the village," so the volume is far from the exciting newcomer Bullish.

From Enthusiasm to a Calm Stock Price Journey

The IPO pricing of Gemini went through multiple adjustments, with the initial price range set at $17-19, later increased to $24-26 due to strong demand, and finally priced at $28, at the top end of the revised range. This pricing reflects a strong market demand for the stock, with Reuters reporting a subscription multiple of over 20 times, demonstrating investors' enthusiasm for the concept of a U.S.-based cryptocurrency exchange platform.

However, the performance on the opening day was quite dramatic, with a roller-coaster-like movement that brought the stock price back to its initial level. The stock started trading at 1:40 PM and immediately surged to $37.01, a rise of about 32% from the IPO price. At one point during the early trading, the price even spiked to $45.89, a 64% increase, triggering a volatility halt in trading. Soon after, the initial excitement was quickly replaced by rationality: by the end of the day, the price had fallen back to $32, narrowing the gain to around 14%.

More concerning was the performance in the following days: as of September 16th, the GEMI stock price had dropped to around $30.42, a decrease of about 6% for the day, down nearly 24% from its peak since going public. This sharp pullback to some extent reflected investors' reassessment of the company's fundamentals.

So, what were the reasons for their reassessment?

Harsh Financial Reality

Gemini's financial performance is deeply concerning, which is the main reason for the stock price decline. According to SEC filings, the company recorded $68.6 million in revenue in the first half of 2025, a 7.7% decrease from $74.3 million in the same period last year. More critically, the net loss amounted to $283 million, far exceeding the $41.4 million loss in the same period last year, a staggering 580% year-over-year increase in losses. Moreover, the first half of this year was not a bear market; so, a major question on investors' minds is, where did the money go?

This deteriorating performance trend is deeply worrying. Taking a longer-term view, Gemini had a full-year revenue of $142.2 million in 2024, a 44.8% year-over-year growth, but still incurred a net loss of $158.5 million. As of the 12-month period ending June 30, 2025, the company's revenue was $136.45 million, indicating a stagnation in revenue growth.

Analysts point out that Gemini is currently heavily reliant on trading fee revenue, accounting for about 70% of total revenue in 2024. The significant increase in losses in the first half of 2025 was mainly attributed to special expenses related to the Genesis bankruptcy case, legal fees associated with the Earn project, debt interest, and asset impairments.

Despite poor financial data, Gemini still shows some growth momentum in operational metrics. In the first half of 2025, monthly active trading users reached 523,000, an increase from 497,000 in the same period last year. Trading volume also saw a significant increase from 166 billion USD in the same period last year to 248 billion USD, a nearly 50% increase. As of July 31, 2025, the company further grew its monthly trading users to 549,000.

Comparison with Bullish: divergent fates of concurrent listings

Gemini's listing followed in the footsteps of other cryptocurrency companies, particularly forming a stark contrast with Bullish, which had just debuted on the New York Stock Exchange about a month before. Bullish is a digital asset platform focused on institutional clients, led by former NYSE President Tom Farley, and backed by prominent investors such as Peter Thiel, BlackRock, and ARK Invest. Its IPO set a positive tone for the entire cryptocurrency IPO market.

Looking at the first-day performance, both companies experienced a frenzy of trading at the opening. Bullish completed its IPO on August 13 at a price of 37 USD, raising about 1.1 billion USD, with an IPO valuation of around 5.4 billion USD. On the opening day, the stock price immediately surged to 90 USD, a 143% increase, reaching a peak intraday high of 118 USD, a gain of over 200%, far exceeding Gemini's first-day peak of 64%. Bullish closed its first day at 68 USD, an 84% increase, showing a similarly strong performance.

However, both companies followed nearly identical trajectories thereafter. By mid-September, Bullish's stock price had fallen to around 51 USD, a drop of about 56% from its peak, with a current market value of approximately 7.8 billion USD. This pullback was more severe compared to Gemini's 24% decline, indicating that even a more robust-performing cryptocurrency IPO struggles to maintain the initial market frenzy.

In terms of market value comparison, the difference between the two is stark. Gemini obtained an initial market value of about 3.3 billion USD at an IPO price of 28 USD, with the current price of around 30 USD corresponding to a market value of about 3.8 billion USD. In contrast, whether it be the 5.4 billion USD valuation at the IPO or the current market value of about 7.8 billion USD, Bullish significantly surpasses Gemini, demonstrating a considerable degree of second-mover advantage.

A Comparative Analysis of Coinbase and Kraken: Signficant Disparity in Industry Competitive Landscape

Comparing Gemini with its main competitors reveals a staggering difference in scale and profitability. As the largest publicly traded cryptocurrency exchange platform in the United States, Coinbase significantly outperforms Gemini in all metrics.

In terms of revenue scale, Coinbase's revenue in the first half of 2025 was approximately $35.3 billion, with $20.3 billion in the first quarter and $15 billion in the second quarter. This figure is 51 times higher than Gemini's revenue of $68.6 million during the same period, showcasing the significant gap between the two. More impressively, Coinbase achieved $1.43 billion in net profit in the second quarter, with an earnings per share of $5.14, while Gemini remained deeply mired in losses.

The disparity is equally evident when looking at trading volume. Coinbase's second-quarter retail trading volume was $430 billion, a 16% year-over-year increase, far surpassing Gemini's total trading volume of $248 billion in the first half of 2025. Coinbase's subscription and service revenue reached $655.8 million in the second quarter, almost matching Gemini's annual revenue level.

Privately held Kraken's performance as a trading platform is equally impressive, with a significant lead over Gemini in both scale and profitability. In the first half of 2025, Kraken recorded $8.84 billion in revenue, with $4.72 billion in the first quarter and $4.12 billion in the second quarter, showing year-over-year growth of 19% and 18%, respectively. This revenue scale is 13 times that of Gemini, demonstrating Kraken's strong market position.

More importantly, Kraken has maintained a healthy level of profitability. Adjusted EBITDA reached $1.87 billion in the first quarter and $800 million in the second quarter, totaling approximately $2.67 billion for the first half of the year. In contrast, Gemini not only operates on a smaller scale but also faces significant pressure from substantial losses.

Looking at historical financial data, this disparity becomes even more pronounced. Coinbase achieved $65.6 billion in revenue for the full year 2024, a 111% year-over-year increase, with a net profit of $25.8 billion and a high profit margin of 41%. The company successfully transitioned from a net loss of $2.6 billion in 2022 to substantial profitability, demonstrating a strong cyclical recovery ability. Kraken's revenue for 2024 reached $15 billion, reflecting a 128% year-over-year growth, with an adjusted EBITDA of $4.24 billion. The company maintained a near break-even state during the cryptocurrency winter of 2022-2023, with only $1.8 million in losses in 2022, and entered a market recovery period in 2024, experiencing rapid and robust profit growth.

In contrast, Gemini achieved only $142.2 million in revenue in 2024, with a net loss of $1.585 billion. The company's performance further deteriorated in the first half of 2025, raising doubts about whether this American native exchange platform's position is secure. In comparison, Gemini seems somewhat like it is treating going public as a last-ditch effort.

As of June 2025, the company's cash balance was only $42.8 million, while short-term debt stood at approximately $680 million, making the asset-liability structure extremely tense. This financial situation to some extent explains why the company urgently needs to improve its capital structure through an IPO.

The Diverging Trend of Cryptocurrency IPOs

Gemini's listing was a significant part of the 2025 cryptocurrency IPO boom. In a more favorable regulatory environment, several cryptocurrency companies chose to debut on the public market in 2025. In addition to Gemini and Bullish, stablecoin issuer Circle also successfully completed an IPO in June, with the stock price "soaring" on the first day, setting a positive precedent for the entire industry.

However, Gemini's performance represents a clear divergence in the market. While factors such as improved regulatory environment, increased institutional adoption, and Bitcoin ETF inflows have provided positive support for the entire industry, investors clearly prefer companies that are already profitable or close to profitability.

Compass Point analyst Ed Engel pointed out that GEMI's current trading price is equivalent to 26 times its annualized first-half revenue. For a loss-making company in a volatile industry, such a valuation multiple is indeed on the high side, which may be a key reason for investor caution and stock price pullback.

Future Outlook: Kraken to List Next Year

It is reported that Kraken is planning to go public in 2026, and the company is currently raising $500 million at a valuation of $15 billion to prepare for the eventual listing. This is a company with a healthy revenue stream.

The co-CEO of Kraken has stated that the company's IPO strategy depends on regulatory clarity. In contrast, Gemini chose to IPO in the current regulatory environment, somewhat bearing the risks of being a pioneer.

From a broader industry perspective, Gemini's listing experience highlights the maturing trend of the cryptocurrency exchange platform industry. Investors are no longer satisfied with just concepts and growth stories but are more focused on actual profitability and a sustainable business model. This trend may drive the entire industry towards a direction that emphasizes operational efficiency and profitability.

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