Gemini’s share price plunges 80% from its IPO; acquisition rumors resurface: the exchange has shrunk—licenses are the real cards

The share price of the encrypted trading platform Gemini (NASDAQ code: GEMI) has fallen by about 80% compared with its IPO offer price in September 2025. Its market value has shrunk from a peak of roughly $4 billion to $753 million. With its trading business contracting, revenue declining, and platform assets cut in half, the exchange founded by the Winklevoss twins has once again been placed on the negotiating table with potential buyers.
There are currently no signs of any active bids, but the U.S. regulatory licenses held by Gemini, its custody infrastructure, and its customer relationships have become the focus of market speculation. Last month, ARK Invest’s head of digital assets research, Lorenzo Valente, publicly suggested on X that the decentralized perpetual contracts platform Hyperliquid should acquire Gemini for about $450 million, turning it into an entry point for U.S.-regulated perpetual contracts and prediction markets. The plunge in the share price has transformed an independently run company under pressure into a “fire-sale” strategic asset.
Phenomenon: share price down 80%, business shrinks across the board
Gemini listed on Nasdaq in September 2025. Its IPO issue price was $28 per share; it opened at $37 on the first day and closed at about $32. Intraday gains at one point exceeded 30%, showing investor enthusiasm for crypto exchanges returning to the public markets at the time. But this momentum quickly reversed.
According to CoinDesk, as of September 20, 2026, Gemini’s market capitalization (GEMI) is about $753 million, down more than 80% from its peak of about $4 billion. The fundamentals deteriorated in tandem: in Q2 2026, Gemini exchange revenue fell 38% year over year to $12.5 million; spot trading volume dropped 66% to $3.8 billion; and platform assets fell from $18.2 billion a year earlier to $8.4 billion.
In the face of contraction in its core trading business, Gemini is looking for a second growth curve in prediction markets and the credit card business. In 2026, the company obtained the CFTC’s DCM and DCO licenses, seeking to restart derivatives and prediction markets within a compliant framework. At the same time, it launched a crypto credit card product, trying to turn users’ assets into revenue in payment scenarios. However, the contribution from these new businesses is still not enough to offset the decline in spot trading revenue.
Regulatory costs are also a heavy burden on the company. Cameron Winklevoss wrote on X this February: “Just the SEC’s legal bills cost us tens of millions of dollars, and also caused losses of hundreds of millions in productivity, creativity, and innovation.” The accusation is aimed at the U.S. Securities and Exchange Commission’s intensive enforcement against crypto companies in the prior regulatory cycle; Gemini was one of the exchanges that most aggressively fought against the SEC.
The business contraction is not limited to numbers. Gemini has exited the UK, the EU, and Australia. Headcount has been cut by about 40% from its peak to around 402 employees, and the company has lowered its full-year compensation and technology spending guidance. The company has continued to post net losses since 2024. In Q1 2026, its net loss was $109 million. Despite revenue growing 42% year over year to $50.3 million that quarter, the loss of 93 cents per share is still higher than analysts’ expected 61 cents.
Why now: the IPO underpricing wave and the regulatory window opening at the same time
Gemini’s valuation collapse is not an isolated case—it reflects the second phase of the re-pricing of valuations in the crypto company IPO boom since mid-2025. BeInCrypto’s statistics show that Gemini fell by about 89% from its first-day opening price of $37. BitGo fell by about 77% from its first trade price of $22.43; Bullish fell by about 71% from its $90 opening price; eToro fell by about 42%; and only Circle and Figure remain above the issue price. The broader sector’s slump has also slowed subsequent listing plans: Kraken’s parent Payward paused its listing in March 2026, and Grayscale, Consensys, and Ledger also delayed their issuance schedules.
For potential buyers, this means they can purchase a ready-made set of compliant infrastructure at a price far below the cost of rebuilding. Valente wrote on X that Gemini’s core business is clearly struggling: its scale is not enough to compete with major U.S. exchanges on spot or derivatives flow, and it lacks a liquidity moat; but a “seemingly struggling independent business may be a strategic asset at a jump-off-the-building price.”
Changes in the regulatory environment provide a time window. Gemini has obtained U.S. Commodity Futures Trading Commission (CFTC) licenses for a designated contract market (DCM) and a derivatives clearing organization (DCO), enabling it to offer perpetual contracts and prediction markets onshore. Meanwhile, the CFTC and SEC’s stance on regulated companies offering on-chain perpetual contracts appears to have softened. Hyperliquid is communicating with the two agencies, trying to persuade U.S. regulated companies to offer perpetual contracts on its public chain.
The mechanism: buyers aren’t buying an exchange—they’re buying licenses, customers, and custody
Valente’s proposal for Hyperliquid is representative: to acquire Gemini’s entire U.S. regulatory stack for about $450 million, of which the value of the regulatory licenses alone could be around $200 million. The acquisition funds could come from HYPE community reserves—using roughly 7.9 million HYPE tokens (2% of the 389 million token reserves). At the then price of $70 per token, that’s about $550 million, enough to complete a full acquisition at a premium of about 20% over the current market cap.
At the core of this logic, what the acquirer truly wants is not a shrunken spot exchange, but three things:
First, regulatory entry. In the U.S., crypto licenses cannot be directly transferred; an acquisition would be treated as a change of control, and the new owner would need to undergo regulatory scrutiny similar to a fresh applicant. But compared to applying from scratch, taking over a platform that already holds DCM/DCO licenses, has a compliance team, and maintains audit records still involves significantly lower time and uncertainty costs. This also explains why, as early as April 2026, insiders told CoinDesk that potential buyers had already closed down Gemini’s Europe and UK operations under review—aiming to obtain regulatory licenses rather than fully take over the entire business.
Second, customers and assets. On average, Gemini users hold about $14.5k in assets on the platform. Even though total platform assets have fallen from $18.2 billion to $8.4 billion, this relatively higher-net-worth user group remains attractive to institutions hoping to enter the U.S. retail market.
Third, custody and clearing infrastructure. Gemini has long operated institutional-grade custody services, combined with a DCO clearing license, giving it scarcity in the area of compliant derivatives and prediction markets. Valente cited examples such as Polymarket’s acquisition of QCEX and Robinhood’s acquisition of Bitstamp, arguing that Hyperliquid can turn Gemini into an America-based de facto regulated HIP-3/HIP-4 trading venue.
Obstacle: the Winklevoss brothers hold 94.5% of the voting rights, so any sale depends on them
The success or failure of any deal depends largely on Cameron and Tyler Winklevoss. Together, they control 94.5% of the voting rights of Gemini. This could both simplify negotiations—no need to fight with dispersed public shareholders—and also means that any sale in practice must have their approval.
The Winklevoss brothers still have long-term commitment to Gemini. In May 2026, they injected $100 million into Gemini through the Winklevoss Capital Fund, partly paid in bitcoin, to support the company’s transition toward prediction markets and agentic trading. Cameron Winklevoss said on X this February that “the SEC’s legal bills alone have drained tens of millions of dollars from the company, and have also caused losses of hundreds of millions in productivity and innovation.” This statement is both an accusation of the regulatory environment and a hint that the founders are not in a hurry to sell the company at a low price.
From the company’s structure, Gemini has been classified as a “controlled company” under Nasdaq rules, granting it exemptions related to board independence, which further consolidates the founders’ control over the company. This structure was seen at the early stage of going public as an arrangement to ensure strategic focus, but in an acquisition scenario it means external shareholders can hardly influence where the deal goes.
In addition, regulatory approvals themselves remain a variable. The UK FCA has clearly stated that authorization for a crypto firm cannot be transferred with an acquisition; a change of control must be approved by the relevant national authority or, at minimum, receive an official non-objection. The U.S. already has a DCM/DCO framework, but cross-agency coordination (CFTC, SEC, and state money-transmission licenses) could still extend the deal timeline.
Impacts and what to watch next
For the crypto exchange industry, the Gemini case signals that the valuation re-pricing of the 2025–2026 listing wave has entered a second stage: moving from underpricing in the secondary market to asset resets in the primary M&A market. If Hyperliquid or other institutions move in, it will open a new paradigm of “DeFi protocol acquisitions of licensed exchanges,” combining on-chain liquidity with onshore compliant entities.
Variables to watch going forward include:
Whether the Winklevoss brothers are willing to sell control after 80% of the company’s market value has evaporated post-IPO, or to continue pursuing an independent transformation by leveraging the prediction markets and credit card business;
The final stance of the CFTC and the SEC on U.S.-regulated companies offering on-chain perpetual contracts will determine the actual monetizable value of the Gemini license;
Whether there are other follow-on bidders—especially offshore exchanges, traditional financial institutions, or payment companies that want to obtain a compliant entry point into the U.S.;
Whether Gemini can stop the downward trend in platform assets and trading volume, otherwise its bargaining power as an independent company will be further weakened.
For now, this remains market speculation triggered by a collapse in the share price, not a finalized transaction. But for the crypto industry, when the market value of a licensed exchange falls below the reset cost of its regulatory stack, the question is no longer “will someone buy?”—it becomes “who will act first.”