Cryptocurrency exchange Gemini, established by billionaire twins Tyler and Cameron Winklevoss, has received a license from the Commodity Futures Trading Commission to introduce prediction markets in the US.
On Wednesday, Gemini announced that its affiliate, Gemini Titan, obtained a designated contract market license from the CFTC and plans to venture into the prediction markets sector.
The company stated that “shortly,” US users will be able to trade event contracts on its web platform. Additionally, Gemini will enhance its US derivatives offerings to encompass crypto futures, options, and perpetual contracts.
Gemini is joining a range of crypto firms that have started to offer prediction markets, enabling users to wager on various event outcomes, including sports and geopolitics.
Gemini’s shares (GEMI) surged 13.7% in after-hours trading on Wednesday to $12.92 after closing the day’s trading session down 0.7%.
The license could significantly benefit Gemini, whose stock has fallen 64.5% since its public debut on September 12, as the cryptocurrency market has struggled to maintain momentum.
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“Prediction markets have the potential to rival or surpass traditional capital markets,” asserted Gemini’s president, Cameron Winklevoss.
This year has witnessed a surge in prediction market popularity, with prominent platforms Polymarket and Kalshi achieving record monthly trading volumes in November. Kalshi also recently secured a $1 billion funding round at an $11 billion valuation.
Critics of prediction markets compare them to gambling, and several US state regulators have initiated enforcement actions against CFTC-regulated platforms regarding their event contracts, arguing they represent unlicensed sports betting.
Gemini CEO Tyler Winklevoss revealed that the exchange first sought the license in March 2020, and the approval “marks the culmination of a 5-year licensing journey and the start of a new chapter for Gemini.”
Offering prediction markets is part of Gemini’s strategy to develop a “super app” for various crypto products, a vision detailed by Cameron Winklevoss during an earnings call last month when discussing the company’s initial quarterly results, which reflected losses attributed to the costs of going public.
The company is competing with other crypto applications that have diversified beyond trading, as crypto wallet Trust Wallet launched prediction markets earlier this month, and Coinbase appears to be developing a site for a prediction markets platform in collaboration with Kalshi.
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