Gemini Listing Day Sees Early Surge Followed by Downtrend, Dimming the Crypto IPO Craze Sparked by Circle

Original Article Title: "Gemini Plunges After Soaring on First Day of Trading, Post-Coinbase IPO Cryptocurrency Hype Cools Down"
Original Article Author: jk, Odaily Planet Daily

The cryptocurrency exchange platform Gemini officially began trading 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, as the stock price rapidly fell after experiencing a frenzy of gains on its first day of trading, exposing that the company's fundamentals had not actually won the confidence of retail stock investors.

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

Gemini's path to listing can be described as full of twists and turns. The cryptocurrency exchange platform founded by Cameron and Tyler Winklevoss in 2014 had been preparing for an IPO for several years. Reports indicate that the company spent about three years preparing for the IPO, but due to unfavorable market conditions and a weak IPO environment, the company had to postpone its listing plans twice in mid-2024 and April 2025.

During the cryptocurrency bull market at the end of 2021, Gemini had obtained a valuation of $71 billion in a funding round, but the subsequent cryptocurrency market crash in 2022, including the collapse of its Earn product and the bankruptcy of its partner Genesis, forced Gemini into a contraction mode. It wasn't 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 wave of cryptocurrency companies going public such as Circle and Bullish. Finally, after months of preparation and roadshows, the company chose to list on Nasdaq through a traditional IPO.

Relatively speaking, Gemini's listing did not cause much of a stir in the cryptocurrency community; one reason is its focus on the U.S. domestic market, with the founding twin brothers being guests at a cryptocurrency-related meeting involving former President Trump, while Gemini's listing style leans more towards a "quiet entry," so it did not generate as much excitement as the newcomer Bullish.

From Frenzy to Calm: The Stock Price Journey

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

However, the performance on the opening day was very dramatic, with a rollercoaster-like movement that brought the stock price back to its original level. The stock began trading at 1:40 PM and immediately surged to $37.01, a roughly 32% increase from the IPO price. In the early trading hours, the price even spiked to $45.89 at one point, a 64% surge that triggered a volatility trading halt. Soon after, the initial frenzy was quickly replaced by rationality: by the end of the day, the price had fallen back to $32, narrowing the gain to about 14%.

Even more concerning was the performance in the following days: as of September 16, GEMI's price had dropped to around $30.42, a 6% decrease on that day, plummeting 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 was very concerning, which was the main reason for the stock price decline. According to SEC filings, the company generated $68.6 million in revenue in the first half of 2025, a 7.7% decrease from the same period last year's $74.3 million. More alarmingly, the net loss was a staggering $283 million, far exceeding the $41.4 million loss from the previous year, representing a 580% year-over-year increase in losses. Moreover, the first half of this year was not a bear market; so, a major question for investors was, where did the money go?

This deteriorating trend in performance is deeply concerning. From a longer-term perspective, Gemini's revenue for the full year of 2024 was $1.422 billion, a 44.8% year-over-year growth, but the net loss stood at $1.585 billion. (In other words, the losses in the first half of this year exceeded the losses for the entire previous year); for the 12-month period ending June 30, 2025, the company's revenue was $1.3645 billion, indicating a stagnation in revenue growth.

Analysts pointed out that Gemini is currently heavily reliant on transaction fee revenue, accounting for about 70% of total revenue in 2024. The company's sharp increase in losses in the first half of 2025 was largely attributed to special expenses such as legal fees related to the Genesis bankruptcy case and the Earn project, debt interest, and asset impairment.

Despite the poor financial data, Gemini still showed some growth momentum in operational metrics. The monthly active trading users in the first half of 2025 reached 523,000, up from 497,000 in the same period last year. Trading volume also rose significantly from $166 billion to $248 billion year over year, a nearly 50% increase. By July 31, 2025, the company's monthly trading users had further increased to 549,000.

Comparison with Bullish: divergent fates of simultaneous listings

Gemini's listing closely followed that of other cryptocurrency companies, particularly forming a stark contrast with Bullish, which had just gone public on the New York Stock Exchange about a month ago. 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, setting a positive tone for the entire cryptocurrency IPO market.

From the first-day performance, both companies experienced a frenzy of early trading. Bullish completed its IPO on August 13 at a price of $37, raising about $1.1 billion with an IPO valuation of around $5.4 billion. On the opening day, the stock price immediately surged to $90, a 143% increase, reaching a peak of over $118 during the trading session, a gain of over 200%, far exceeding Gemini's highest one-day rise of 64%. Bullish's closing price on the first day was $68, up 84%, showing equally strong performance.

However, the subsequent trends of both companies were almost identical. By mid-September, Bullish's stock price had fallen to around $51, a decrease of about 56% from its peak, with a current market capitalization of around $7.8 billion. This pullback was more severe compared to Gemini's 24% decline, indicating that even a more robust-performing cryptocurrency IPO struggled to sustain its initial market fervor.

In terms of market capitalization, the difference between the two is quite evident. Gemini obtained an initial market cap of about $3.3 billion at an IPO price of $28, with the current stock price of around $30 corresponding to a market cap of about $3.8 billion. In contrast, Bullish's market valuation, whether the $5.4 billion estimate at IPO or the current approximately $7.8 billion market cap, significantly surpasses Gemini, demonstrating a considerable advantage of a later entrant.

Horizontal comparison of Coinbase and Kraken, significant industry competitive gap

Comparing Gemini with its main competitors, the astonishing gap in scale and profitability is evident. As the largest publicly traded cryptocurrency exchange in the United States, Coinbase far outperforms Gemini on all metrics.

In terms of revenue scale, Coinbase generated approximately $35.3 billion in revenue in the first half of 2025, with $20.3 billion in the first quarter and $15 billion in the second quarter. This figure is 51 times Gemini's $68.6 million revenue during the same period, highlighting the vast difference 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 remains deeply mired in losses.

The difference is also evident in terms of trading volume. Coinbase's retail trading volume in the second quarter was $430 billion, a year-over-year increase of 16%, far surpassing Gemini's total trading volume of $248 billion in the first half of 2025. Coinbase's subscription and services revenue reached $655.8 million in the second quarter, a single revenue item that is close to Gemini's annual revenue level.

Privately held Kraken's trading platform also performed impressively, significantly outpacing Gemini in both scale and profitability. In the first half of 2025, Kraken recorded revenue of $8.84 billion, with $4.72 billion in the first quarter and $4.12 billion in the second quarter, representing year-over-year growth of 19% and 18%, respectively. This revenue scale is 13 times that of Gemini, demonstrating Kraken's strong position in the market.

More importantly, Kraken has maintained a healthy level of profitability. Adjusted EBITDA reached $187 million in the first quarter and $80 million in the second quarter, totaling approximately $267 million 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.

A closer look at historical financial data reveals a more pronounced trend in this disparity. Coinbase achieved $6.56 billion in revenue for the full year 2024, a 111% year-over-year increase, with a net profit of $2.58 billion and a profit margin as high as 41%. The company successfully shifted from a net loss of $2.6 billion in 2022 to a substantial profit, showcasing a robust cyclical recovery capability. Kraken's 2024 revenue reached $1.5 billion, a 128% year-over-year growth, with an adjusted EBITDA of $424 million. The company maintained a near breakeven state during the cryptocurrency winter of 2022-2023, only incurring a $1.8 million loss in 2022. As the market entered a recovery phase in 2024, Kraken rapidly achieved strong profit growth.

In contrast, Gemini only achieved $142.2 million in revenue in 2024, with a net loss of $158.5 million. The company's performance deteriorated further in the first half of 2025, raising doubts about whether this U.S.-based exchange, one of the top three, can maintain its position. Gemini seems to be somewhat reminiscent of grasping at straws by considering going public as a last resort.

As of June 2025, the company's cash balance was only $42.8 million, while short-term debt amounted to approximately $680 million, indicating a rather strained asset-liability structure. This financial condition 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 marked a significant part of the 2025 boom year for cryptocurrency IPOs. In a more favorable regulatory environment, multiple cryptocurrency companies chose to go public in 2025. In addition to Gemini and Bullish, stablecoin issuer Circle also successfully completed its IPO in June, with the stock price soaring on the first day of trading, setting a positive precedent for the entire industry.

However, Gemini's performance signifies that the market has begun to exhibit clear divergence. While factors such as regulatory improvements, increased institutional adoption, and Bitcoin ETF inflows have provided positive support for the entire industry, investors clearly favor 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. Such a valuation multiple is indeed high for a loss-making company in a volatile industry, which may be a key reason why investors are cautious and the stock price has experienced a pullback.

Future Outlook: Kraken to IPO Next Year

It is reported that Kraken is planning to go public in 2026, with the company currently raising $500 million at a $15 billion valuation in preparation for the eventual listing. This positions Kraken as a financially healthy company.

Kraken's co-CEO has stated that the company's IPO strategy hinges on regulatory clarity. In contrast, Gemini chose to IPO in the current regulatory environment, to some extent, 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 increasingly focused on actual profitability and sustainable business models. This trend may drive the entire industry towards a direction that places more emphasis on operational efficiency and profitability.

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