Gemini Q3 Crypto Trading Volume Falls 73% to $4.5 Billion

Gemini’s market maker handles 26% of spot volume

Institutional volume fell to $3.9 billion from $14.6 billion a year earlier. Retail volume fell to $600 million from $1.8 billion. The exchange still collected about three quarters of its exchange revenue from retail customers, down from about 90% a year earlier.

Volume rose 18% from Gemini’s second quarter. Gemini credited more institutional Zcash trading and expanded activity by its market-making subsidiary, which buys and sells from its own account to provide liquidity. That subsidiary was the counterparty to about $1.2 billion of spot trades during the quarter.

Zcash accounted for $1 billion in trades, about 22% of total volume. It ranked second behind Bitcoin and ahead of Ether. The filing gave the total for the subsidiary across markets and did not say how much of the Zcash volume it handled. The Winklevosses are also behind a separate proposed Zcash ETF.

Gemini revenue falls as its net loss narrows

Exchange revenue fell 47% to $13.4 million. Credit card revenue rose 82% to $15.5 million, overtaking exchange revenue for the quarter. Services revenue and interest income together accounted for 59% of net revenue, up from 47% a year earlier, even as their combined dollar amount slipped to $23.3 million from $23.4 million.

The company cut operating expenses 30% year over year, with lower compensation and marketing spending. Its net loss narrowed to $58.6 million from $159.5 million a year earlier. The operating loss widened to $79 million from $76.9 million in the second quarter as lower revenue and higher stock-based compensation offset other cuts.

Gemini’s adjusted EBITDA loss narrowed to $11.6 million from $74 million in the second quarter. The company attributed part of that improvement to a $50.8 million swing in results on crypto assets and related-party crypto loans. Coinbase also reported a large contribution from crypto investment gains in its third-quarter results.

Gemini Predictions revenue rises 52%

Prediction-market revenue rose 52% from the previous quarter to about $800,000 after trading incentives, equal to roughly 2% of total revenue. Gemini plans to let other brokerages and exchanges use its venue and clearinghouse to offer event contracts to their customers.

The company has a nonbinding agreement in principle with Apex Fintech Solutions that would make Gemini Titan the exclusive regulated venue for crypto event contracts Apex distributes to brokerage clients under the arrangement. Gemini said the parties were still negotiating the terms and scope.

The Crypto Fear & Greed Index dropped to 13 on Saturday from 20 on Friday, remaining in Extreme Fear.

Gemini gave no launch date for the Apex arrangement. Its next quarterly filing will show whether spot volume continued to recover from the second quarter and how much of that activity still involved its own market maker.