Summary Gemini Space Station, Inc. receives a tactical buy rating, supported by its expansion into regulated US prediction markets via a CFTC license. GEMI demonstrates strong product diversification, with service revenue now 39% of total and credit card revenue up 75% quarterly. Despite a >50% post-IPO decline, GEMI's doubling of revenue and rising recurring service income signal improving fundamentals. I recommend a high-risk, 1% portfolio allocation, as institutional trading drives volume but yields lower margins; proof of recurring revenue is key. Investment Thesis In today's article, we will discuss Gemini Space Station, Inc. ( GEMI ), a company that acts as a link between traditional finance and the crypto sector. It currently offers its customers a cryptocurrency exchange and custody platform, where institutions can buy, sell, and store digital assets, offering complementary services such as staking, custody solutions, and other payment products. At the same time, it is expanding its reach into regulated products in the US, with the aim of diversifying its revenue beyond digital asset trading, by applying for a DCM (Designated Contract Market) license from the Commodity Futures Trading Commission (CFTC). This license has been applied for through a subsidiary of the company, Gemini Titan LLC, and the aim is to offer products on the American prediction markets, competing with Polymarket . This is why we saw a 14% increase in the share price yesterday, as shown in the image below. Obtaining this license allows Gemini to open a new line of business in a very large market (the US), which causes the share price to rise. From my point of view, I think it's a bit early, and it's more like “buying the news” than an impact on the company's value, until we start to see the results of that line of business. Seeking Alpha In the following image, we can see the evolution of the GEMI share price since its IPO in September 2025. As can be seen, the evolution to date has not been good, as the share price has fallen by more than 50%. In this regard, the approval of the CFTC license could be a turning point (new product + potential for incremental take rate), but the long-term chart reminds us that the market will demand proof that this catalyst translates into recurring revenue and improved profitability, and is not just “buying the news.” With all this in mind and based on what we will see throughout this analysis, my current thesis regarding Gemini is to buy, assuming a high risk of uncertainty for the time being. Therefore, I would not allocate more than 1% of the portfolio tactically, assuming that you are not already exposed to cryptocurrencies or companies related to digital assets (exchanges, mining companies, or payment companies). Seeking Alpha Business Model & Operating Segments: How Gemini Makes Money Gemini Website In the image above, we can see all the products Gemini offers to the market. As can be seen in the image, Gemini seeks to offer a 360° service to customers interested in digital assets. Currently, its product pipeline consists of the following: Trading: here it offers the ActiveTrader product, with corresponding access to the crypto spot market and derivatives on those assets. Within this area, it also offers the possibility of trading tokenized stocks and staking services. Institutional: this is the range of trading products, but applied to institutional clients. These are products that are usually monetized via commissions. Custody: offers a wallet service. According to the company, all these products are designed to increase user retention by offering discounts or commission rebates, as they do in tokenized stock trading. Q3 Report 2025 In the second image in this section, we see how Gemini monetizes the product range mentioned above. In its third quarter 2025 report , Gemini presents data of 587k in MTUs, $16.4 billion in volume, $21.3 billion in assets on the platform, and $50.6 million in total revenue, with $19.9 million in services revenue (i.e., 39% of the total), which is relevant because it suggests that product diversification is beginning to materialize and is not solely dependent on trading. If we look at the payments layer (Gemini Card), we see that it appears to be gaining traction, with 63.7k users registered quarterly and more than 115k accounts opened. Revenue from the card has increased by 75%, which indicates to me that they are achieving their goal of product diversification and revenue consolidation. This, added to the new venture they want to launch in the American prediction market, leads me to propose the buy thesis in this article. Unit Economics: The Growth Of Gemini Q3 Report 2025 Looking at the unit economics of the business, we see that Monthly Transacting Users rise from 478k (3Q24) to 587k (3Q25) and Lifetime Transacting Users from 1.372M to 1.605M, while Assets on Platform go from $13.2B to $21.3B (with BTC as the largest contributor, $14.4B in 3Q25). This asset and user base provides the company with recurring monetization capacity. The main caveat here, and why I recommend a 1% allocation, is that the trading volume mix skyrockets to $16.4B in 3Q25, but is driven primarily by institutional trading ($14.6B), which typically has much lower fees. This can be seen in the “Exchange revenue” item, where retail contributes about $22 million compared to institutional, which contributes about $3.2 million, a reminder that growing “in volume” does not always equate to growing “in margin.” If we look at the income statement (left side of the image above), we can see sufficient arguments to defend the buy thesis. We can see a doubling of Total Revenue (from $24.5M (3Q24) to $50.6M (3Q25)), with Service Revenue rising from $7.3M to $19.9M, consolidating its position as a significant portion of the company's total revenue. Within the services segment, 3Q25 shows a clear acceleration in “less cyclical” levers such as Credit Card Revenue ($8.5M) and Staking Revenue ($5.9M), in addition to achieving growth in Custody Fees ($2.8M). All of this helps to improve revenue per active user (in order of magnitude, revenue per MTU rises from $51/quarter to $86/quarter). Final Thoughts Last but not least, with the license now secured, the company is entering a new market, competing head-to-head with companies such as Polymarket and Kalshi, which currently share the market (approximately 40% and 60%, respectively). Considering that Gemini already has a solid retail user base (587K monthly transacting users and 1.605M lifetime transacting users), I believe they could leverage that user base as synergy to gain market share, which currently represents between 3% and 8% of the total sports betting market. In the medium to long term, this could have a positive impact on Gemini's revenues, causing its stock to rise. Thank you for reading.
