The Winklevoss twins’ twin exchange now has $ 30 billion worth of cryptocurrencies in custody as competition intensifies among the leading US exchanges.
In an announcement on May 11, the stock exchange attributed much of the growth this year to strong demand from institutional clients:
“Given the impressive growth of the crypto market this year and the increased involvement of institutional investors, we have more than tripled the crypto we hold since the beginning of 2021.”
Gemini works with major asset managers including BlockFi, Blockchange, CoinList, CI Global Asset Management, DAiM, BTG Pactual, Caruso, Eaglebrook Advisors and WealthSimple.
The New York-based company was founded in 2014 by Cameron and Tyler Winklevoss. Ahead of Coinbase’s direct listing on the Nasdaq on April 14, the couple told Bloomberg that they would “consider” bringing Gemini to the public as well.
If Gemini or any other major exchange were to be listed on the stock exchange, it could have a significant impact on Coinbase’s share price – which has fallen from $ 328.28 on its first day of trading to its current $ 288.46.
Is Coinbase Overrated?
Veteran Wall Street analyst and New Constructs CEO David Trainer said in a statement to clients Tuesday that he expects Coinbase’s share price to fall to $ 100 or even lower due to increased competition. Trainer suggested that Coinbase is currently overvalued, noting that the current valuation implies that it will exceed the combined annual sales of the Intercontinental Exchange and Nasdaq.
“Investors should expect the stock to continue to underperform as stocks could fall to $ 100 or less if it becomes clear that the company is unlikely to meet future earnings expectations that are incorporated into the stock price.”
Coinbase is expected to post earnings of $ 3.07 per share on Thursday on revenue of $ 1.82 billion on Thursday. Trainer said even if it exceeded expectations it would only attract more competitors and lower future revenue.
“Coinbase is unlikely to be able to sustain future blowout profits once competition comes into the market,” he said.
In April, Trainer warned that the planned $ 100 billion valuation for Coinbase was way too high due to increased competition from Gemini, Bitstamp, Kraken and Binance.
Figures released in March suggest that Coinbase Custody had more than $ 90 billion in assets under custody by the end of 2020.