Gemini Eyes Prediction Markets Amid Rising Competition

NASDAQ-listed Gemini Space Station, the crypto exchange run by billionaire twins Tyler and Cameron Winklevoss, is looking to enter prediction markets, joining the wave of companies looking to take advantage of bets on elections, sports, and other real-world events.

Upcoming Derivatives Exchange from Gemini

The company has filed with the Commodity Futures Trading Commission (CFTC) to run its own derivatives exchange. Bloomberg reports that Gemini is eager to roll out products quickly, and internal discussions suggest the platform could offer prediction contracts once approved. However, the CFTC application is still under review months after it was filed.

Timing could be a challenge. Obtaining approval for a new derivatives exchange typically takes several months, and the recent federal government shutdown may further delay the process. 

Some companies have avoided the wait by partnering with existing licensed platforms. Robinhood, for example, allows customers to trade event contracts through Kalshi.

Gemini would go head-to-head with Kalshi, a CFTC-registered exchange, and Polymarket, which plans to reopen to US customers after operating offshore. 

Both platforms have seen a surge in trading activity, with Kalshi hitting $1.2 billion in weekly volume between late October and early November, topping its previous record of just over $1 billion, and Polymarket also surpassing the billion-dollar weekly mark.

Rising Competition

Other major players are entering the space as well. Intercontinental Exchange, which owns the New York Stock Exchange, invested $2 billion into Polymarket at a $9 billion valuation. 

CME Group and Coinbase have announced plans for event contracts, and MetaMask, DraftKings, and Sam Altman’s World have all added prediction market features in recent months.

Before going public in September, Gemini said in securities filings that it planned to launch event contracts covering politics, sports, economic data, and financial markets. The company raised $433 million in its IPO at a $4.4 billion valuation, though shares have fallen roughly 40% since. Gemini still posts losses and handles only a small fraction of US crypto trading, according to its IPO documents. Its first public earnings report is scheduled for November 10.

Analysts see prediction markets as a way for Gemini to diversify beyond crypto. A Needham analyst noted the potential, but the regulatory landscape is still unsettled. While the CFTC has allowed Kalshi to expand into new markets, state gaming regulators, who traditionally oversee sports betting, have challenged federal authority in court.