Gemini: The Coinbase Alternative

Summary Gemini Space Station, Inc. (GEMI) leverages strong regulatory compliance and recent MiCA licensing to expand its crypto exchange and custody services in the US and EU.

GEMI's revenue is driven by trading fees and institutional custody, with a positive near-term outlook due to healthy futures activity, despite weaker mining economics. GUSD stablecoin remains a niche product, contributing modestly to P&L; its future growth depends on broader EU integration and technical adoption.

Given moderate cyclical tailwinds and the need for further execution, maintaining a hold position is recommended while monitoring the Operating Pulse indicator. Introduction In today's article, we will analyze the company Gemini Space Station, Inc ( GEMI ), which is owned by the famous Winklevoss brothers.

These two brothers are very well known for suing Mark Zuckerberg, and in the space of cryptocurrencies and digital assets, for investing in Bitcoin very early. Gemini Space Station is the parent of Gemini crypto-asset exchange and custodian, overseen since 2015 as a limited purpose trust company by the New York regulator (NYDFS).

This regulatory fit allows the company to operate as a trustee, with segregated custody and ongoing compliance checks, and is central to the company's business case. In Europe, Gemini has been granted the MiCA license in Malta, which gives it a passport to provide services in the EU and enables product expansion under a harmonized framework.

For the shareholder, this “compliance first” positioning is the value proposition that the company wants to differentiate against rivals with greater network effects. The company's IPO has taken place in an environment of reopening the crypto IPO market.

The company went public, with a price of $28 per share (above the range). In addition to this, it raised $425M with 15.

2 million shares and debuted with double-digit rises on the Nasdaq. In addition, Nasdaq participated with $50M in a private placement, and demand for the book far outstripped supply, with oversubscription references of 20×.

The core of the business is trading fees (maker/taker model and simple interface fees), which depend on the volume transacted and the mix of clients (retail and institutional). This is in addition to custody services for institutions with an explicit fee (e.

g. 0.

4% per year or $30 per month per asset held), a high-interlocution OTC desk and the eOTC platform for large electronic executions. After the purchase of Omniex, the prime brokerage offer integrates execution, settlement and custody, simplifying flows for family offices, managers or fintechs that need a regulated provider.

The result is an income basket that combines trading and custody with direct sensitivity to the crypto cycle. An additional pillar that the company has is GUSD , the stablecoin of the house.

GUSD is backed 1:1 and publishes verified reserve reports according to NYDFS guidance: cash at regulated banks, money funds and T-Bills ≤3 months, with segregated accounts in favor of holders. For the company, GUSD provides financial income from the return on those reserves (net of costs), in addition to increased activity within the ecosystem.

In high-rate environments, that line helps; if GUSD rates or circulants fall, the contribution decreases. With MiCA in Malta, Gemini has launched for EU perpetual clients (unmatured derivatives) and regulated staking – for now with a focus on ETH and SOL – broadening the revenue base beyond the spot market.

This creates natural cross-sell into institutional custody, where margins can be better than in pure retail. The European regulatory context is still setting in and there is debate about the uniformity of criteria across countries, but MiCA's passport is a clear operational advantage if commercial execution goes hand in hand.

Analysis - Fundamental In this section, we will analyse some sector indicators in detail to try to offer the reader an accurate perspective and a sound recommendation on the vehicle in question. The first metric analyzed is a proprietary indicator of Node Analytica, which tracks the activity of the Gemini exchange in the crypto market.

Our metric synthesizes the “operating state” of the crypto ecosystem by combining two drivers that drive the business: on the one hand, the miner economy (approximated by the hashprice in z-score, that is, how much up/down it is with respect to its recent average), and on the other hand, the activity in markets (futures volume also in z-score). The z-score allows us to quickly read if we are in an expansive (>0, euphoria when >+2) or contractive ( Today, the composite looks slightly positive, but with an internal divergence, as the futures component remains in a healthy zone (volatility/living activity), while the hashprice has been weaker after halving and periods of lower fees, leaving miners with narrower margins.

This combination suggests a sustained market, not so much for the on-chain profitability of the miner, but for the rotation and leverage in derivatives. This means revenue for the company directly.

Gemini mostly monetizes trading fees, so a positive pulse, pulled by futures, is constructive for its P&L, especially now that the company is pushing derivatives under the MiCA umbrella in the EU: if the global futures cycle is strong, there is more beta for Gemini in that line. Indirectly, the mining side matters because it conditions the market climate.

If the hashprice continues to be pressured, there may be spikes in volatility due to tactical sales, which paradoxically can increase volumes and trading fees in the short term, although it requires excellent risk management. Node Analytica The second metric analyzed is the historical evolution of transactionality, volume and users using the GUSD stablecoin.

As can be seen in the following photo, today it is a clearly niche establishment within the ecosystem, with an offer of around 50 M$, very irregular transfer volumes and a modest daily activity. This is not good at first, but nor should it necessarily be “bad.

” This data speaks to a more functional than massive use, since GUSD is used as a passing asset to move money between accounts, consolidate balances or park cash transparently, rather than as a widely circulated currency in shops or high beta DeFi. For GEMI’s shareholders, the key message is one of materiality: GUSD’s business provides financial income from the return on reserves 1:1 (cash, money funds, very short-term T-Bills), but with a small float its contribution to P&L is limited.

Turning to the graph, we can also see that the decline in supply from the peaks of 2023–2024, together with the low frequency of use, suggests that GUSD is not a growth engine in itself today, but a product that reinforces Gemini’s “compliance and custody” proposition and helps retain customers within the ecosystem. The main strategic angle of the company is how to activate GUSD to multiply its utility and, with it, its circulation.

Here the natural catalyst is regulated expansion in the EU, because if Gemini manages to integrate GUSD into local on-/off-ramps, payment and card programs, and institutional cash flows where asset segregation and reserve transparency are valued, the float can grow without resorting to risk strategies. It would also help to expand their technical distribution (more chains, more integrations with brokers and fintechs) and provide everyday use cases, always with a solid fit of risk and compliance after the Earn episode .

While that’s coming along, you’ll want to read these panels realistically: the base is small, adoption is stable but low, and volume spikes are episodic, so the investor should think of it as a secondary lever that improves retention and makes customer operations cheaper, not as GEMI’s big driver of short-term benefits. Artemis Conclusion Currently, Operating Pulse is on slightly positive territory thanks to the futures boost, which favors GEMI's short-term trading commissions, but the weakness of the hashprice after halving warns of a less robust environment on the mining side and suggests that the cycle may be interrupted by the mining side.

Moreover, GUSD is now a niche establishment with a small float, useful for loyalty and operational improvement but with little influence on P&L, so the thesis depends more on capturing share in derivatives under MiCA and scaling prime brokerage than on the financial contribution of GUSD. With these two metrics, I see a moderate cyclical tailwind but an execution to prove; I would hold position if you're already in, I would watch for the pulse indicator to stay positive.

Thank you for reading.