What Is the Gemini Exchange?

In the crowded field of digital currency exchanges, a service is only likely to succeed if it can set itself apart from the rest of its competitors. In this way, the Gemini Trust Company, also known as the Gemini Exchange, has a distinct advantage.

Founded in 2014, Gemini is the brainchild of Cameron and Tyler Winklevoss, the famous investors and Harvard classmates of Mark Zuckerberg. Gemini has worked to be at the forefront of the cryptocurrency exchange world, working alongside Nasdaq to revolutionize the way that transactions are monitored and recorded.

Key Takeaways

  • Gemini Exchange is a cryptocurrency trading service that combines an exchange, a fiduciary custodial service for digital assets and an advanced trading platform for professionals.
  • Gemini is unique for its custodial service that holds $200 million in insurance for its crypto holders.
  • Gemini was founded by the Winklevoss twins who were classmates of Mark Zuckerberg at Harvard. Gemini is the astrological symbol for twins.

Understanding the Gemini Exchange

The Winklevoss brothers announced the launch of Gemini in early 2014, although the exchange did not go live until October 2015.

As of April 2020, Gemini is in operation in 49 U.S. states, Washington D.C., Puerto Rico, Australia, Canada, Hong Kong, Singapore, South Korea, and the United Kingdom. Like other digital currency exchanges, Gemini allows users to buy and sell a variety of digital currencies, either with digital currency (for example, using bitcoin to buy litecoin) or using fiat currency like U.S. dollars to buy digital currencies.

Gemini Products

Gemini boasts a diverse range of products for small investors who want to stay long on cryptocurrency to advanced traders who want advanced features like charting and instant trades.

Gemini Exchange is Gemini's platform for buying and selling cryptocurrency. It is available both through your web browser and as an app on both the iTunes store and Google Play app store. The mobile app also includes the Gemini Wallet, which allows users to pay for goods using their crypto holdings.

For advanced traders, Gemini offers its Active Trader Platform. According to its website, the platform features "advanced charting, multiple order types, auctions, and block trading." They also claim to be able to execute orders in "microseconds," but that may depend on how you define "execute" and what kind of cryptocurrency you're trading.

The Gemini Custody product is both a cold storage system for assets held by Gemini and a "crypto-native finance platform." The Custody product is unique in that it provides insurance coverage of $200 million for crypto holdings and is a fiduciary and custodian licensed under New York Banking law, making Gemini arguably the most secure crypto exchange that has ever existed. Gemini also is a clearinghouse for off-exchange trades.

The Gemini dollar (GUSD) is Gemini's stablecoin based on the US dollar. Users can spend GUSD or a few other, select cryptocurrencies with Gemini Pay, a function built into the Gemini app.

Gemini Exchange Background

The Gemini Exchange set itself apart in early May 2016 when it became the first licensed ethereum exchange in the United States.

In May 2018, Gemini became the world's first exchange to be licensed to offer zcash trading as well. This announcement followed a report that Gemini began to offer block trading in April 2018, allowing users to buy and sell large orders of digital currencies outside of Gemini's usual order books. Block trading was implemented in order to create additional liquidity opportunities.

Gemini has expanded its partnerships with other organizations and companies. The most notable of these is Gemini's partnership with Nasdaq, announced in April 2018. Through this collaboration, Gemini will utilize Nasdaq's SMARTS technology in order to weed out fraudulent activity and manipulation of digital currency prices. Besides the Nasdaq partnership, Gemini also partnered with Caspian, the digital currency trading and risk-management service.

As with most digital currency exchanges, Gemini has seen its share of issues. In late November 2017, for instance, Gemini crashed for several hours in the wake of unusually high demands on its website. Rival exchange Coinbase also crashed around the same time. In response, Gemini representatives wrote on the company blog to indicate that "this is not the first scaling challenge we've encountered, and it won't be the last," adding that the exchange is "continuing to improve our performance and infrastructure monitoring so we can anticipate potential problems more quickly in the future."

Gemini has worked to ensure compliance with federal and state regulations regarding the sale and purchase of digital currencies. As such, the company markets itself as a "New York trust company regulated by the New York State Department of Financial Services."

Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns bitcoin and ripple.