Gemini reported a second-quarter net loss of $107.7 million as weaker trading activity pressured its exchange business. Results were released August 13, while shares fell over 7% after hours.
Total revenue increased 37% year over year to $45.5 million from $33.3 million. However, exchange revenue dropped 38% to $12.5 million as trading volume fell sharply.
Gemini trading volumes weaken during crypto downturn
Trading volume on Gemini’s main exchange declined to $3.8 billion from $11.3 billion a year earlier. Assets on the platform also fell to $8.4 billion from $18.2 billion over the period.
The decline followed steep losses across Bitcoin and other cryptocurrencies, which had dropped roughly half their value over the period. Reduced activity highlighted the exchange’s continued dependence on transaction-driven revenue.
Monthly transacting users increased 11% year over year. However, those customers traded less, limiting revenue generated from exchange activity.
Gemini is not alone in facing weaker crypto trading conditions. The broader industry has also faced lower asset values and reduced fees.
Credit cards and staking support Gemini revenue growth
Gemini has expanded beyond cryptocurrency trading while building a broader financial markets platform. Credit card revenue increased 231% to $16.2 million.
Staking revenue climbed 50% to $4 million. Gemini’s prediction market generated $500,000, up from $400,000 previously.
Event contracts traded rose 93% from the first quarter, while total contracts surpassed 225 million. The company also announced its derivatives clearinghouse this month.
The Commodity Futures Trading Commission approved the clearinghouse in April. Gemini said it will clear contracts internally and later support futures, options, and perpetual products.
“While we still have work to do as a company, this quarter’s results reflect our ongoing efforts to reduce operating expenses while diversifying revenue,” Chief Executive Tyler Winklevoss said.
President Cameron Winklevoss said, “The Gemini platform has changed more in the past nine months than it did in the past decade.”
Gemini stock remains under pressure after results
Gemini is competing with Coinbase and Robinhood as each company broadens services beyond spot cryptocurrency trading.
Coinbase reported a 10.3% share of crypto trading volume in its second-quarter results, up from 9.1% in the first quarter. Its prediction-market contracts and revenue rose 106% quarter over quarter.
Robinhood has also combined crypto trading, prediction markets, and stock trading within one application.
Gemini launched commission-free stock trading in the United States in July. Earlier reports said it reduced its workforce by 25% and ended operations in the United Kingdom, European Union, and Australia.
Gemini Space Station shares were trading near $4, close to an all-time low. The company went public at $28 per share in September and reached $45.89 on its first trading day.
