Crypto Exchange Gemini Teases IPO

Cryptocurrency exchange Gemini may be considering an initial public offering (IPO). In an interview with Bloomberg, Cameron and Tyler Winklevoss, co-founders of the exchange, said they were open to the idea of going public. "We are watching the market and we are also having internal discussions whether it makes sense for us at this point of time," said Cameron Winklevoss, president at Gemini.

While analyst firms and publications have made revenue estimates about its competitor Coinbase, not much is known about Gemini's financials. The company recently increased its headcount to 350 employees and announced that it had surpassed $10 billion worth of digital assets under custody. The Winklevoss brothers are the outfit's main investors.

Key Takeaways

  • Crypto exchange Gemini's co-founders have said they are considering the possibility of going public
  • Not much is known about Gemini's financials, but the company has launched several initiatives over the years to attract customers, retail and institutional, to its platform.

If the New York-based exchange does decide to tap public markets, then it will become the third crypto business to do so in recent times. Coinbase, North America's largest cryptocurrency exchange by trading volume, has already filed with the Securities and Exchange Commission (SEC) for an IPO. Bakkt, a crypto trading platform backed by NYSE owner Intercontinental Exchange, Inc. (ICE), went public with a special purpose acquisition company (SPAC) last week at a valuation of $2.1 billion.

A Good Time to Go Public?

Part of the reason for public listings of crypto businesses is a change in circumstances in their markets. After multiple years of a slump, bitcoin (BTCUSD) prices skyrocketed past $40,000 this year, breaching its earlier record of $20,000. Retail investors were supposed to have driven past price increases in cryptocurrency markets, but news reports are crediting institutional participation for the latest surge. This means that there is more liquidity in crypto markets as compared to the 2017 bull run, making them less susceptible to wild swings.

The infrastructure and capabilities for crypto exchanges have also advanced, making it possible for them to incorporate a wider variety of customers and trades. Macroeconomic instability and integration of digital currencies into public and private ventures have also bumped up the price of Bitcoin.

For crypto businesses like Gemini, these developments should translate to greater revenue. The exchange has announced partnerships in the past to encourage retail transactions using crypto and launched specific products, such as custody solutions, targeted at institutional investors. In the absence of public data or cost estimates, however, it is difficult to guess whether these initiatives have moved Gemini's revenue needle.

Meanwhile, the exchange announced the launch of yet another product to boost its revenue and user numbers. The Gemini credit card is the crypto equivalent of a regular cashback credit card in which customers will get up to 3% back in Bitcoin or other cryptocurrencies for every purchase. To store the cryptocurrency, customers will have to create accounts on Gemini's cryptocurrency exchange, thereby boosting its user numbers.

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