Gemini Shuts Down Operations in Key Markets
Gemini, the cryptocurrency exchange established by the Winklevoss twins, is shutting down its operations in the United Kingdom, the European Union, and Australia, the company reported on Thursday. This significant restructuring effort will also see the company reduce its workforce by 25%. The decision aims to streamline Gemini’s expenses and sharpen its focus on more promising areas, specifically prediction markets.
Challenges in International Markets
Founded in 2015 in the U.S., Gemini expanded into more than 60 countries; however, the company has encountered numerous challenges in these international markets. In a blog post addressing the changes, Tyler and Cameron Winklevoss expressed that the competition abroad has proven to be tougher than anticipated. They cited an unsustainable level of complexity in their operations, which has adversely affected their cost efficiency and growth speed. They also highlighted a lack of sufficient demand to maintain these international services.
Operational Changes and Customer Impact
Operations in the affected regions will wind down gradually, with all accounts officially closing by April 6. Starting March 5, customers will enter a “withdrawal only” mode, allowing them to remove their assets. Users looking to transfer funds can do so through a partnership Gemini has established with eToro.
Focus on Prediction Markets and AI
In addition to slashing jobs, Gemini is pivoting towards incorporating artificial intelligence to enhance operational efficiency in its remaining markets. The company’s strategy now focuses on its prediction market offerings and the lucrative U.S. cryptocurrency market, especially after receiving a CFTC license in December to launch a predictions market. Since then, Gemini has attracted over 10,000 users and has seen trading volumes hit $24 million, showcasing the platform’s rapid transformation.
Future Aspirations and Market Reaction
The Winklevoss twins have high aspirations for prediction markets, stating that they could potentially eclipse traditional capital markets.
They argue that such markets harness collective insights to accurately forecast future trends, a sentiment that resonates with investors, as evident from recent substantial funding rounds for competitors like Kalshi and Polymarket, which have achieved impressive valuations.
Following these announcements, shares of Gemini fell sharply, losing more than 7.5% on the same day to trade around $6.77. This downturn is noteworthy, considering Gemini’s shares began trading in September at $28—a staggering 313% premium relative to the current market price. This week, Gemini had also disclosed the closure of its NFT platform, Nifty Gateway, which it acquired in 2019 and played a significant role during the NFT boom of 2021-2022.
