Cryptocurrency exchange Gemini faces a severe test just six months after going public. As Bitcoin plummeted 40-50% from its peak, triggering another "crypto winter," the company's aggressive expansion strategy has become a burden.
Bloomberg reported on the 22nd (local time) that "Gemini is now being tested on how quickly it can transform itself." The analysis suggests that while the company expanded on the assumption that the bull market would continue, Bitcoin's price collapse has made a strategic shift inevitable.
Gemini made a splashy debut on Nasdaq last September. At listing, shares reached a high of $45.89, with market capitalization approaching $4 billion (approximately 5 trillion won). But circumstances have changed dramatically. The stock has plunged more than 80% from its peak, and market cap has shrunk to below $700 million.
The $425 million raised through the IPO was expected to serve as a safety net. However, when the market turned, being a public company became a constraint instead. Additional fundraising requires complex disclosures, and rights offerings could further dilute existing shareholders' stakes.
The IPO has become a "test of performance disclosure" rather than a "certificate of success."
Earlier this month, the company announced layoffs of up to 25% of its workforce. It subsequently decided to withdraw from the UK, EU, and Australian markets, with additional staff cuts reportedly occurring in the United States as well. Market anxiety intensified when three key executives—the Chief Operating Officer, Chief Financial Officer, and Chief Legal Officer—all departed on the same day.
According to foreign media sources familiar with the company's situation, some U.S. employees were quietly let go recently beyond the official announcement. Employee dissatisfaction has grown as stock bonuses granted after the IPO plummeted in value. Some employees reportedly "worked seven days a week" out of fear of being laid off.
The financials paint an even harsher picture. Net revenue last year rose 17% to $175 million, but total expenses surged nearly 70% to $530 million. Global spot trading market share fell from 0.6% to 0.1%. The company maintained its size but lost its strength.
Truist Securities analyst Matthew Kord and others noted, "Management bet excessively on the assumption that the cryptocurrency bull market would continue through 2027," adding, "Given the slowing user growth rate and cash burn rate, investors cannot help but worry about solvency."
The Winklevoss brothers have proposed prediction markets as a breakthrough. In a recent official blog post, they emphasized, "Prediction markets will become as large as, or larger than, today's capital markets."
However, foreign media have observed, "This is a fiercely competitive field where formidable players including Coinbase, Robinhood, Kalshi, and Polymarket are already battling it out, so it remains to be seen whether this gambit will lead to a turnaround in performance."