Gemini skyrockets as Winklevoss Capital invests $100m in crypto exchange

Gemini Space Station, the cryptocurrency exchange established by the Winklevoss twins, experienced a rise in its share price during after-hours trading following a $100 million investment from Winklevoss Capital Fund, the venture capital firm owned by the crypto tycoons.

The fund acquired Class A common stock shares of the company at $14 each, with the transaction settled in bitcoin.

This disclosure was made as part of their first-quarter financial report. Initially, shares jumped by about 30%, eventually settling with an increase of 17%.

"We are confident that the market has greatly undervalued Gemini, and this investment will enable us to prepare the company for its upcoming growth phase," Tyler Winklevoss, CEO of Gemini, stated.

"Gemini has reached several crucial milestones related to products and regulations, which prepare us to evolve from a crypto company into a markets company," he continued. "This funding will support those ambitions and position Gemini for long-term success."

For the first quarter, Gemini reported a narrower loss than anticipated, with earnings showing a loss of 93 cents per share. Analysts had expected a $1.03 loss per share, according to FactSet. The revenue amounted to $50.3 million, exceeding projections of $47.9 million.

The exchange's revenue declined by 27% year-over-year to $17.2 million, while credit card revenue surged nearly 300% over the same period, reaching $14.7 million. Services revenue and interest income increased by 122% compared to the previous year, totalling $24.5 million.

Since going public in September, Gemini has faced challenging times marked by sustained losses, leadership changes, withdrawal from international markets, and a "company transformation" towards artificial intelligence and prediction markets.

A legal action in New York claims that Gemini misled investors regarding its strategy during its initial public offering.

The stock has seen a significant decrease from its IPO peak—it originally rose 14% during its initial trading, reaching a 52-week high of $45.89 on that day.

By the close of trading on Thursday, shares were priced at $5.26 each. Bitcoin has declined roughly 30% since Gemini’s launch in September.

Investors will likely keep an eye on whether Gemini can establish consistent revenue streams without depending on crypto market surges—a common challenge for publicly traded crypto companies as the industry evolves.

Cameron Winklevoss, a cofounder and the president of Gemini, recently spoke with CNBC about ongoing efforts to stabilise revenue that otherwise fluctuates with cryptocurrency prices.

He highlighted that while Gemini has its origins in crypto, it’s just "one chapter" of their story. Winklevoss further mentioned that turning into a company "more aligned with markets … should stabilise our revenue."