Honestly, observing what is happening with Gemini, you realize that something fundamentally changed in crypto. It’s not just market fluctuations — it’s a structural reorientation of the entire industry, and the story of this exchange has become a perfect illustration of this shift.

Recall the summer of 2025. It was euphoria. Bullish conducted an IPO on August 13 at $37 per share, and on the first trading day, the price jumped above $100 — an 83% increase. BlackRock and Ark Invest were already ready to buy shares worth $200 million. Less than a month later, on September 12, Gemini also went public on Nasdaq. It opened at $37, attracted twentyfold demand, with a total valuation of $3.3 billion. The market celebrated — this was the moment when crypto finally stepped onto the main stage, when exchanges that had survived numerous crashes received a legitimacy stamp from traditional capitalism.

Now, fast forward to April 2026. Bloomberg revealed a picture that the Winklevoss brothers, founders of Gemini, feared most. The stock price fell from the issuance price of $28 to $5 — a loss of over 80% from its peak. The company cut 30% of its staff, exited several international markets, and the CEO, CFO, and legal director parted ways with the company. From listing to collapse, Gemini is not just the story of one exchange; it’s a mirror reflecting the entire transformation of the crypto industry.

How did this happen so quickly? Part of the answer lies in the numbers. In the first half of 2025, Gemini’s revenue was only $67.9 million, with a net loss of $282 million. In the third quarter, revenue doubled to $50.6 million, but the loss still reached $159.5 million. The reason? Listing brought not only capital but also a constantly growing regulatory compliance bill.

It sounds paradoxical, but Gemini’s strategy to position itself as the most compliant crypto exchange became its Achilles’ heel. When trading volumes shrink, revenue drops proportionally. But costs for maintaining the status of a public company and regulatory compliance? They don’t decrease — they stay the same. Audits, legal consultations, SEC reports, investor relations, AML and KYC processes — all of this costs money every month, regardless of whether the exchange trades billions or millions.

Data from CoinLaw shows that average compliance costs for medium and small crypto companies increased from $620,000 in 2025 to $760,000 annually in 2026 — a 22.5% rise. For a public company, this list doubles. Even Coinbase, as a major player, was fined $100 million by NYDFS for violations of AML and cybersecurity rules.

By the end of December 2025, Gemini held 4,619 bitcoins — over $330 million at current prices. But these assets don’t help when the company loses $585 million a year. The Winklevoss brothers are forced to consider converting their loans into several hundred million dollars in shares — essentially diluting their own capital to save the company from bankruptcy.

But that’s only part of the story. What’s happening with Gemini is a symptom of a deeper disease in the crypto market. For years, there was an assumption that the crypto market was a closed liquidity reservoir. When Bitcoin grew, funds flowed into Ether, then into Solana, then into dozens of low-cap altcoins. This created waves of wealth redistribution, where early entrants received exponential profits.

It worked as long as crypto remained a niche asset with high barriers to entry. Early participants naturally earned a premium for rarity. But look at 2025: spot ETFs on Bitcoin, spot ETFs on Ether, stocks of MSTR, Bitmine, and dozens of other instruments. Global crypto ETPs now manage nearly $180 billion. Institutional investors now have a “compliant and low-threshold entry channel” — they no longer need to go to the secondary market to buy Solana or some altcoin. They can simply buy a Bitcoin ETF.

The result? Bitcoin’s dominance in 2025 fluctuated around 59%, and the total market capitalization of non-Bitcoin cryptocurrencies fell from $1.77 trillion in October to $1.19 trillion in December — a 32% drop. Even approvals for altcoin ETFs like Solana, XRP, Dogecoin, Chainlink didn’t change the picture. Capital flows remain highly concentrated in Bitcoin and Ether. Altcoins lost that magical status where each bullish wave created new millionaires.

The debut of crypto assets was never just a bubble — it had real structural sources. First — a premium for regulatory arbitrage. Non-compliant exchanges had a natural advantage because they didn’t bear the costs of regulation. But as compliance costs become more uniform globally, this difference disappears. Gemini, as a public exchange, and smaller unlisted exchanges — all pay for the “entry ticket” to regulation.

Second — a premium for liquidity scarcity. When entering crypto was difficult, early entrants received exponential returns. But with the spread of ETFs, institutional entry costs fell, and that “additional return that could previously only be obtained on the secondary market” no longer exists.

Gemini’s problem is that it built its brand over ten years as the most compliant crypto exchange. But at the moment of listing, this premium turned into an obligation. Compliance is now a basic entry threshold, not a competitive advantage. Meanwhile, Gemini bears heavier fixed costs than any unlisted competitor.

The situation for the entire crypto market is similar. The preferences that once supported extraordinary profits for crypto assets are gradually being exhausted by the market. Only true fundamental indicators remain: real protocol usage, liquidity depth, institutional acceptance stability.

In this world, increasingly approaching traditional finance logic, the era when valuation was supported by stories and FOMO may quietly be ending. Gemini has become a victim not so much of its own mistakes as of the changing rules of the game on which the entire industry was built.