Listing wave on exchanges? Winklevoss brothers are considering taking their exchange Gemini public.

The recent bull market in the past few months has reignited interest in the cryptocurrency market, leading to more and more U.S. cryptocurrency companies considering going public. According to Bloomberg, following Coinbase and Bakkt, billionaire twins the Winklevoss twins are also planning to take their exchange public.

Gemini Exchange Considering Going Public

Tyler Winklevoss and Cameron Winklevoss invested $11 million in Bitcoin as early as 2013, making them globally renowned Bitcoin billionaires with an estimated net worth of around $2 billion each, according to the Bloomberg Billionaires Index.

The Winklevoss twins have various options for taking Gemini public, such as through an Initial Public Offering (IPO) or a reverse merger. Recently, two cryptocurrency exchanges have announced plans to go public through these methods.

The largest U.S. cryptocurrency exchange, Coinbase, announced on December 18, 2020, that it would be listing its stock on the public market through an IPO. The company has submitted an S-1 form to the Securities and Exchange Commission (SEC) and is expected to have Goldman Sachs underwrite its stock. On the other hand, Bitcoin futures exchange Bakkt is reportedly planning to merge with VPC Impact Acquisition Holdings through a reverse merger.

Gemini is a digital asset trust company regulated by the New York Department of Financial Services, with licensed operations including exchange and custody services. The exchange recently revealed that its custodial assets have exceeded $10 billion. Additionally, back in April 2020, the exchange received a Service Organization Control (SOC) certification from the Big Four accounting firm Deloitte.

Announcement of Going Public Draws Attention

Recent actions of exchanges going public have pushed the cryptocurrency market into the mainstream, but they have also sparked doubts within the industry. According to previous reports, FTX founder Sam Bankman-Fried (SBF) is not optimistic about the future prospects of institutions like Coinbase and Bakkt, even going as far as to compare them with FTX.

Sam pointed out that Bakkt's valuation of $500 million is questionable, with projected revenue for 2021 only around $55 million, making a $20 billion valuation for its listing seem excessive. As for the exchange Coinbase, while its current profitability is undisputed, Sam has reservations about its business model and future development. He mentioned that Coinbase's revenue last year was around $1 to 2 billion, while FTX, with roughly double the trading volume, failed to even reach $1.5 billion in revenue, mainly due to Coinbase charging four times the fees of FTX. The Block's Research Director Larry Cermak also believes that Coinbase's high fees and unsustainable profit model could be problematic in the long run. Sam agrees with this assessment and suggests that Coinbase may shift its focus more towards institutional clients in the future.

Considering Gemini's current trading volume performance, it may not escape Sam's critical remarks once the official announcement of going public is made.