Cryptocurrency exchange Gemini reported its lowest quarterly retail trading volume in three years, despite growth in overall crypto trading volume.
Total spot trading volume rose 18% from the second quarter to $4.5 billion, according to Gemini’s third-quarter results report. Institutional trading volume increased 26% to $3.9 billion, while retail volume fell 14% to $600 million, its lowest level since the third quarter of 2023.
Gemini said quarterly growth in spot trading volume was “supported by increased activity from institutional participants in Zcash and expanded activity by affiliated market makers,” but did not specify the reason for the decline in retail trading.
Despite a downturn in the retail segment, Gemini’s exchange revenue rose 7% quarter over quarter to $13.4 million, as institutional revenue more than doubled. Retail traders remained the company’s largest source of exchange revenue, accounting for nearly three-quarters of the total.
Crypto exchanges turn to prediction markets in search of growth
Several crypto exchanges also reported a decline in crypto trading activity in the latest quarter.
Coinbase reported a decline in activity among retail and institutional participants: spot trading volume among users fell 9% quarter over quarter to $23.4 billion. Coinbase CFO Alesia Haas said that “continued growth in prediction markets helped offset the decline in crypto trading activity.”
Robinhood’s crypto revenue fell 55% year over year to $120 million, offset by a sixfold increase in event contracts revenue to $173 million.
Gemini also received some support from its own prediction market, Gemini Predictions: the division’s revenue grew 52% quarter over quarter to $796,000, but that was not enough to offset declines in other areas.
Gemini plans to expand prediction markets
Gemini reported stronger activity in its prediction market ahead of the fourth quarter: the average daily number of traders in October was about 50% higher than the third-quarter average.
Nearly a third of new traders on the prediction market had not used Gemini before — more than twice the share in the third quarter.
The company is also looking to distribute its event contracts through other platforms. An August non-binding agreement with Apex Fintech Solutions provides for Gemini Titan to become the exclusive venue for crypto event contracts distributed by futures broker Apex to its brokerage clients, subject to the execution of definitive agreements.
Gemini will hold its third-quarter earnings call on Friday.