Gemini scales back crypto exchange, pivots to prediction markets and betting
Gemini, the digital asset exchange created by Tyler and Cameron Winklevoss, is executing some of the deepest cuts in its history and reshaping its core business model. The company is trimming up to a quarter of its staff, exiting several major international markets, and placing its bets—literally—on a new prediction and wagering platform called Gemini Predictions.
According to internal plans, Gemini intends to lay off as many as 200 employees worldwide, affecting teams in the United States, Singapore, and other hubs. That figure represents roughly 25% of the exchange’s global workforce, underscoring how dramatically the company is pulling back from its original ambitions as a global crypto trading powerhouse.
At the same time, Gemini is winding down its presence in three key regions: the United Kingdom, the European Union, and Australia. For customers in those jurisdictions, accounts will be switched to withdrawal-only mode starting March 5. Users will have a one‑month window to remove their assets, after which accounts will be fully closed. This operational retreat is part of a broader restructuring effort that Gemini estimates will cost around $11 million.
The restructuring follows a bruising financial period. In November, Gemini posted a loss of approximately $159.5 million. Much of that red ink stemmed from the hefty expenses tied to its initial public offering plans and aggressive marketing campaigns, which failed to translate into the kind of sustained growth the company had hoped for. Despite entering the market back in 2014 and branding itself as a compliant, regulation‑friendly exchange, Gemini has struggled to win significant market share in an industry dominated by larger, more liquid rivals.
Persistent volatility in the broader crypto space has compounded those troubles. With Bitcoin sliding below $70,000, risk appetite across digital assets has weakened, and trading volumes have come under pressure. For fee‑driven businesses like centralized exchanges, lower trading activity can quickly erode revenue, especially if they are carrying high fixed costs from engineering, compliance, and marketing.
Faced with these headwinds, Gemini is redirecting its focus from traditional spot crypto trading toward a newer product segment: prediction markets and betting. In December, the company launched Gemini Predictions, a platform that allows users to place wagers on the outcomes of various events. Since going live, the service has processed more than $24 million in volume and attracted around 10,000 users, according to company figures. While those numbers are modest compared to mainstream sportsbooks or top-tier exchanges, they indicate early traction in a niche that sits at the intersection of finance, betting, and entertainment.
The Winklevoss twins are banking on the idea that prediction markets can become a more sustainable and differentiated business line than competing head‑to‑head with giant crypto exchanges on trading fees alone. By shifting resources toward Gemini Predictions, they are signaling a belief that speculation on real‑world events—from sports and politics to economic indicators—could prove more resilient and engaging than pure crypto trading, especially in turbulent markets.
Gemini’s retreat from the UK, EU, and Australia also highlights the growing strain of operating a regulated exchange across multiple jurisdictions. Licensing, compliance, and reporting requirements have intensified in recent years, particularly in Europe, where new frameworks are raising the bar for crypto businesses. For a mid‑sized player like Gemini, maintaining full‑scale operations in several tightly regulated markets can become increasingly expensive, especially when margins are under pressure and user growth is slowing.
The decision to concentrate on fewer regions and on a narrower product set reflects a classic consolidation strategy: shrink to survive, then attempt to grow again from a leaner base. By shedding staff and closing non‑core operations, Gemini aims to reduce overhead and free up capital for products it believes can deliver higher engagement and better unit economics than its legacy exchange.
Yet the pivot to betting and prediction markets carries its own set of risks. Regulatory scrutiny around wagering on political, financial, and social events is tightening, particularly in the United States. Authorities are still debating where to draw the line between financial derivatives, gambling, and novel prediction platforms. Any misstep in how these products are structured, marketed, or offered across borders could expose Gemini to new compliance and legal challenges, even as it tries to escape the old ones.
From a strategic standpoint, the move underscores a broader shift within the crypto and fintech ecosystem. Many early crypto firms built their business models around trading fees, hoping to emulate the economics of high‑volume stock brokerages or neobanks. As competition has intensified and regulatory costs have risen, that model has begun to show its limitations. Exchanges that once relied on explosive bull‑market growth now face the reality of thinner margins, higher compliance spending, and customers who are less willing to trade constantly.
Gemini’s experience is a case study in this evolution. A high‑profile brand, deep pockets, and early‑mover status have not guaranteed dominance in a market where liquidity and network effects tend to concentrate around a small number of platforms. With marketing campaigns and an IPO process adding substantial fixed costs, the company has found itself squeezed between regulatory demands and cyclical downturns in trading activity.
Prediction markets, on the other hand, promise a different kind of engagement. Users are not only betting on price movements of digital assets but on real‑world narratives: elections, sporting events, major policy decisions, and cultural moments. This can create a more diverse stream of activity that is less directly tied to crypto market cycles, potentially smoothing out volatility in revenue. If Gemini can build a loyal user base around this type of speculative entertainment, it may secure a path to profitability that pure crypto trading could not provide.
However, success is far from guaranteed. Gemini will need to differentiate Gemini Predictions in a crowded field that includes traditional sportsbooks, decentralized prediction protocols, and other emerging wagering platforms. Product design, user experience, liquidity, and trust will all be decisive factors. The company’s reputation as a compliant, security‑focused operator could be an advantage, but only if it can translate that into a compelling, easy‑to‑use product that appeals not just to crypto natives but to a broader audience.
The layoffs and international withdrawals also raise questions about customer confidence. Users in the UK, EU, and Australia will be forced to move funds and potentially seek new providers, which could damage Gemini’s brand in those markets for years to come. Even customers in the US and Singapore may view the cuts as a sign of instability, unless the company communicates a clear and credible long‑term vision around its pivot to predictions and betting.
Over the coming months, the effectiveness of Gemini’s strategy will likely be measured by a few key indicators: whether Gemini Predictions can meaningfully scale beyond its initial $24 million in volume, how quickly the company can stabilize its finances after the $159.5 million loss, and whether remaining operations can operate efficiently enough to support product innovation rather than just survival.
For employees, the restructuring marks a painful inflection point. A 25% workforce reduction is more than a minor trim; it often involves rethinking entire departments, product lines, and roadmaps. Teams that remain will be under pressure to execute a new strategy with fewer resources, even as they manage the technical and operational work involved in closing international accounts and complying with withdrawal and shutdown timelines.
For the broader industry, Gemini’s move sends a signal about where some mid‑tier exchanges see their future. As the easy growth phase of crypto trading slows and regulatory expectations rise, more firms may look to adjacent sectors—such as prediction markets, tokenized real‑world assets, or hybrid financial‑entertainment products—to find new sources of revenue and engagement. Whether this will lead to sustainable new business models or simply another cycle of speculative experimentation remains to be seen.
For now, Gemini is betting that smaller, leaner, and more focused is better than big, global, and overextended. Crypto trading is no longer its only game. The company’s future now hinges on whether it can turn speculation about world events into a viable business, after discovering that speculation on digital coins alone was not enough.