Simply put
- Citi has downgraded Gemini’s rating from “neutral” to “sell,” indicating it may take years for the exchange to become profitable again.
- GEMI stock saw a drop of over 16% in a single day, outpacing declines in other major crypto stocks.
- This week, Citi also reduced its price targets for Bitcoin and Ethereum.
Early Wednesday, shares of Gemini, the crypto exchange founded by the Winklevoss twins, dropped more than 16% after Citigroup analysts made a negative revision, forecasting a long road to profitability.
The NASDAQ-listed GEMI was downgraded to a “sell” with a reduced price target dropping from $13 to $5.50, as noted by analysts earlier that day. By the time this was reported, GEMI shares were trading around $5.95, reflecting that steep drop since market opening.
Gemini was launched in 2014 and began operations the following year, initially focusing solely on Bitcoin trading. Over time, it diversified its offerings to include various crypto products and services such as spot trading, derivatives, staking, institutional custody, an over-the-counter desk, stablecoins, and a rewards credit card.
Last September, Gemini made its debut on the Nasdaq Global Select Market, with an initial public offering (IPO) priced at $28 per share, raising a total of $425 million and placing its valuation at roughly $3.3 billion. The twins had aimed to go public as early as 2021 but postponed the plans due to the downturn in the crypto market and regulatory uncertainties.
Citi’s downgrade pushed the stock further below its intended offering price.
Gemini has plans to release its fourth-quarter and full-year 2025 financial reports on Thursday, followed by a results discussion in a conference call Friday morning.
To manage costs, the company has already announced plans to exit operations in the UK, EU, and Australia, as part of a wider strategy aimed at reducing expenses and steering the company toward profitability. Users were given two months to withdraw funds before account closures on April 6th, along with a workforce reduction of 25% and increased reliance on AI for efficiency improvements.
The Winklevoss twins believe these changes will help align expenses with reduced headcount and accelerate profitability, even in the current challenging crypto landscape, as they communicated in a joint letter. Their motto seems to be “Simplify, integrate, and accelerate.”
Citi also revised its predictions for Bitcoin and Ethereum this week, putting the 12-month forecast for Bitcoin at $112,000 (down from $143,000) and Ethereum at $3,175 (down from $4,304).
Currently, Bitcoin trades around $71,250 while Ethereum hovers near $2,175. Both coins saw declines on Wednesday, likely attributed to disappointing U.S. inflation reports and rising concerns over ongoing conflicts in Iran.
An analyst from Citi remarked that, although recent regulatory changes have spurred some growth and adoption, the prospects for substantial legislative moves in the U.S. this year seem to be waning.
Upcoming midterm elections might further complicate the push for crypto-related regulations, with how Democrats perform potentially impacting the Cryptocurrency Market Structure Act’s chances of advancement.
Despite this bearish outlook and falling prices, many Myriad users maintain a somewhat optimistic short-term stance on Bitcoin, suggesting there’s a greater chance it may surge to $84,000 rather than drop to $55,000.
