Gemini stock: Will Winklevoss Twins’ company crash below $5 after earnings?

Gemini Space Station stock price will be in the spotlight this week as the Winklevoss Twins-backed crypto exchange publishes its financial results.

GEMI has dropped to $7.2 from last year's high of $46, which has dropped its market capitalization from over $4 billion to $850 million.

Gemini Space Station's business is facing major challenges ahead of earnings 

GEMI stock price has dropped sharply since its initial public offering (IPO) in September last year.

This retreat has coincided with the performance of most companies in the crypto industry, including popular names like Coinbase and Bullish.

The retreat also coincided with the weakness in the crypto industry, with Bitcoin and most altcoins being deeply in the red.

Bitcoin dropped from the all-time high of 126,200 in October last year to a low of $60,000 in February.

Similarly, other coins like Ethereum, XRP, and Solana all tumbled.

A sharp decline in cryptocurrencies leads to weakness in volume traded in centralized and decentralized exchanges.

This decline affects a company like Gemini more than Coinbase because it generates most of its revenue in transactions. 

This is unlike Coinbase, which makes money in areas like stablecoins, custody, subscription, and blockchain reward solutions. 

At the same time, the recent Bitcoin crash has impacted its business because it holds 4,002 coins, making it the 24th biggest publicly traded holder of Bitcoin.

Its holdings are now worth over $304 million, lower than $502 million in October last year.

The most recent results showed that Gemini Space Station’s trading volume rose to $16.4 billion in the third quarter from $6.7 billion in the same period in 2024. 

Its total transaction revenue rose to $26 billion, up sharply from $14.5 billion. As a result, its total net revenue rose to $49.7 million from the previous $24 million.

Analysts expect the upcoming report to show that its revenue rose to $51.8 million in the fourth quarter, bringing its annual revenue to over $170 million.

Analysts also expect that its revenue will jump to $282 million this year.

The challenge, however, is that Gemini Space Station continues to lose money, with its loss-per-share coming in at $6.78. Its recent results showed that its expenses jumped by 70%. 

To solve this challenge, the company recently announced that it was slashing up to 25% of its workforce and exiting key markets like the UK, the European Union, and Australia. Its Chief Operating Officer, Chief Financial Officer, and Chief Legal Officer exited the company in a single day.

Another challenge is that its recently launched prediction marketplace is off to a slow start, with its volume being less than $50 million since its launch.

Instead, other large platforms like Polymarket and Kalshi are handling millions of dollars each week.

Gemini stock price could crash to an all-time low after earnings 

GEMI stock price chart | Source: TradingView 

The daily chart reveals that the GEMI stock price has crashed since its initial public offering last year.

It has slumped from $46 on its IPO day to the current $7.2.

The stock remains below all moving averages and the descending trendline that links its highest swing in December last year and March 10.

It has remained below the Supertrend indicator and the 50-day moving average.

Therefore, the GEMI stock price will continue falling, potentially to the all-time low of $5.80 after earnings.

A move below that level will point to more downside, potentially to below the psychological level at $5.