Summary Gemini has been hit hard by some very negative updates. A deeper dive into the fundamentals doesn’t offer up too many positives. Stay sidelined until GEMI’s earnings later this month. Gemini Space Station, Inc. ( GEMI ), co-founded by the Winklevoss twins (of The Social Network fame), is primarily a US-based crypto exchange serving retail, institutional, and over-the-counter clients. In recent years, the company has expanded into higher-growth “services revenue” streams as well, including credit cards, staking, and custody. Gemini In a way, Gemini is a higher “beta” Coinbase ( COIN )—by virtue of its smaller size and more exchange-dependent business model. In an upcycle, Gemini has a lot more P&L leverage and should, therefore, outperform. The inverse is also true, however; in crypto downcycles, this is a business that will struggle to cover its expenses. So, with bitcoin almost cut in half at this point and the other majors suffering even deeper drawdowns, Gemini is understandably struggling again. Compounding its troubles are a major business restructuring, followed by an eye-opening C-level shakeup in recent weeks. None of these bode well for the fundamental case. Still, sentiment is already very bearish, with Gemini stock now down well over 70% post its IPO. Not great for existing investors, but for new money, a turnaround (if it materializes) will have a lot of torque. Hence, the investment case deserves a closer look here, in my view. Data by YCharts Winklevoss In; Everyone Out Very rarely do you see an entire senior management bench cleared out, never mind so soon after an IPO. Thus, Gemini’s late February 8-K disclosing that its Chief Financial Officer (Dan Chen), Chief Operating Officer (Marshall Beard), and Chief Legal Officer (Tyler Meade) would be leaving the company effective immediately was a bit of a shock. Gemini In their place, Gemini co-founder Cameron Winklevoss will oversee operations, with Danijela Stojanovic (formerly Chief Accounting Officer) taking over as interim CFO and Kate Freedman (formerly Corporate Secretary) taking on legal duties. Here’s what the new leadership bench looks like: Gemini Obviously, this isn’t ideal. Yes, Gemini hasn’t delivered, and change, starting with Winklevoss taking on active management duties, was clearly needed. But the disruptive nature in which Gemini’s C-level has been shaken out does raise some very serious governance questions. Operationally, the removal of a COO and CFO, both of whom have been key in the fast-growing credit card business, also adds a lot of uncertainty about Gemini’s go-forward investment case. Last but not least are the stock-based compensation implications from this churn. Recall from Q3 that Gemini disclosed a big step up in operating expenses, with a very sizeable ~$44m of that coming from “stock-based compensation tied to IPO equity awards.” Also recall from the IPO filing these IPO-related awards come with a 180-day lockup that expires this month. Expect this selling pressure to hit the tape soon. Gemini Stock comp will remain a big part of Gemini senior management compensation, as evidenced by the follow-up S-8 filing , disclosing new stock-based incentives for the interim CFO, and that this year’s stock comp will be “equal to 5%” of outstanding shares. Expect more of this, given that Gemini likely won’t be cash generative for some time and has yet to rebuild its C-suite. Which means that even if we do see a successful turnaround, Gemini equity is likely getting diluted along the way. Gemini From Growth to De-Growth? Gemini’s C-level reshuffle comes on the heels of its “winding down” operations in the UK, Europe, and Australia. This leaves the company with the US and Singapore, though the small size of the latter means Gemini will effectively focus only on the US. Gemini Why the strategic shift? Per the 8-K, filed in conjunction with its preliminary Q4/FY numbers , this is really a cost-cutting exercise intended to get the company back to profitability. As part of the plan, Gemini will cut a very substantial ~25% of its workforce and incur a one-off ~$11m pre-tax restructuring charge (to be recognized in Q1 2026). So, in the grand scheme of things, does losing a mid- to high-teens % revenue contributor even matter? I think so. Recall from the S-1 that international expansion had been a key part of the growth strategy. From obtaining MiCA and MiFID licenses in the EU to launching derivatives and tokenized products, as well as an offshore presence in Bermuda (to serve regions where Gemini isn’t regulated), there was quite a bit of growth promise here. All of that potential is now off the table. Instead, Tyler and Cameron want to “focus and double down on America” without the distractions of “foreign markets,” where demand hasn’t been great. Fair enough. But the US isn’t an easy market either. Though Gemini has been around since 2015, its share of spot trading is down at 0.2% (vs. 0.6% at last year’s peak). Clawing back share while also cutting costs won’t be easy in a highly competitive US market. This leaves two bright spots—prediction markets and credit cards. There’s actually growth here, with prediction markets seeing >10k users and $24m traded since launch in December last year. Of course, it’s early days, and Gemini is well behind the likes of Polymarket and Kalshi on volumes. So, it's worth tempering the optimism here. Credit cards are the more proven growth driver, having seen some very good traction in Q3 (+75% revenue QoQ). Interestingly, cards have also been an “onboarding funnel,” adding 55% of new transacting users last quarter. Again, though, this is a competitive market and one that requires investment for share gains. With Gemini now in cost-cutting mode, I would be cautious about extrapolating the growth we saw in 2025. Gemini Set Up for a Big Guidance Reset As for where things stand today, Gemini’s preliminary financial update, ahead of its official Q4 results call (scheduled for 19 th March), showed good traction at the net revenue line (“between $165 million and $175 million”), thanks to credit cards. In tandem, MTUs (or Monthly Transacting Users with activity in the last thirty days) also rose +17% YoY to 600k. But a closer look at the print showed more negatives than positives. Firstly, while users did grow relative to last year, the rate of growth actually slowed (+2% QoQ from +12% QoQ in Q3). Secondly, this growth was outpaced by operating expenses. From personnel costs to marketing, G&A, and stock comp, management pegged total costs for the full year at “between $520 million and $530 million,” or +72% higher than last year. The result is that adjusted EBITDA (“between $(267) million and $(257) million”) is also tracking well below expectations for the year. What I’d like to point out is the scale of these losses—at the adj. EBITDA level, this result implies Gemini ran a low double-digit % cash burn rate in Q4 alone. Clearly, not a sustainable path. Gemini Does restructuring the business help? In the context of the cash burn, a clear yes, as Gemini would have faced solvency issues otherwise. Where it doesn’t help, though, is growth. Recall that Q3 guidance was a “20-25% CAGR” for MTUs—clearly a bull market projection that needs to be reset a lot lower. Until we get this big reset (likely at Q4/FY results later this month), it’s still far too early to bet on a turnaround, in my view. Gemini Conclusion All in all, Gemini probably isn’t the ideal way to play crypto. Yes, a turnaround, either in the crypto cycle or the business itself, could see the stock outperform quite significantly. But the downside risk, as I’ve covered in the article, is also very significant. With this week's rebound taking the forward EV/Revenue multiple back into “growth stock” territory, I’d remain sidelined until results later this month. Data by YCharts
