The Gemini stock price has plummeted to an unprecedented low, following a decline that began shortly after its IPO in September.
Summary
- The decline in Gemini shares has resulted in a staggering $2.6 billion loss.
- This drop aligns with a sell-off involving Bitcoin treasury firms.
- Technical analysis suggests further declines, potentially reaching $5.
Gemini Space Station, backed by the Winklevoss Twins, has fallen to a historic low of $9.70, representing a ~80% decrease from its peak. Its market capitalization has shrunk from $3.81 billion to the current $1.14 billion.
Reasons Behind Gemini Stock Price Drop
Founded by Tyler and Cameron Winklevoss in 2013, Gemini is a leading cryptocurrency exchange. It became public in September, similar to other crypto firms such as Circle, Bullish, and Figure.
After a brief surge to $45, the stock has faced a sharp decline to its current value of $9.8. This drop corresponds with the recent downturn in the cryptocurrency market, impacting Bitcoin (BTC) and various altcoins.
This downward trend mirrors the decline of Bitcoin treasury firms like Metaplanet and Michael Saylor’s Strategy. Notably, Gemini ranks as the 26th-largest Bitcoin treasury firm globally, controlling 4,002 coins valued at $372 million.
The stock’s decline can be attributed to the performance of Bitcoin and other altcoins over recent months. Typically, crypto exchanges encounter lower volumes during bear markets.
Differing from Coinbase, Gemini derives most of its revenue from transaction processing and lacks a significant custody, stablecoin, or subscription service.
The company also released a mixed financial report. Its revenue rose to $50.6 million in the third quarter, up from $24 million in the corresponding period last year. However, net losses increased to $160 million from $87 million.
Growing losses indicate that the company might consider raising capital, having ended the quarter with $487 million in cash and equivalents, along with $87 million in restricted cash and equivalents.
The GEMI stock has also fallen due to declining sentiment toward newly listed firms. Circle, which initially spiked, has diminished significantly, wiping out over $40 billion in value. Similarly, Bullish stock has plunged by 65% from its peak. Companies like eToro and Webull, which provide crypto trading services, have also experienced a downturn.
Gemini Space Station Stock Analysis
The two-hour chart illustrates that the GEMI stock price has been in a pronounced downward trend for the past few months. It has formed a descending channel and has consistently stayed below the 50-period moving average.
Gemini stock continues to remain under the Supertrend indicator, forming a consistent pattern of lower lows and lower highs. Thus, the most probable scenario is that it will keep declining as bears aim for the support level at $5. This outlook may change if it manages to rebound above the upper boundary of the channel.
