Robert has reported for a variety of international publications including the Associated Press, The Guardian, Vice, and Decrypt. Current areas of interest include the political economy of technology, cryptocurrencies, and privacy. Robert has a Bachelor of Science from UCL, and a Master's degree from the University of Oxford's Internet Institute.
Gemini is a cryptocurrency exchange. It’s registered in the U.S. and operates globally. Like all of the other cryptocurrency exchanges, Gemini comes with the standard crypto trading fare: You can buy and sell cryptocurrencies like Bitcoin, either for other cryptocurrencies or directly for fiat, plus complicated derivatives products.
What distinguishes Gemini from the pack is probably more important if you are incredibly rich or trading with other people’s money: regulation. Since the exchange opened its doors in 2014, Gemini has positioned itself as an exchange that seeks to bring order to the wild world of cryptocurrencies.
Why “Trust” is Gemini’s Product
To understand how this works, it helps to compare Gemini with one of its competitors, Binance.
Binance attracts customers with ultra-high leverage trades—until the end of July, up to 125x (!)—which are incredibly volatile but also potentially highly lucrative. Binance claims it has no headquarters, and it operates in jurisdictions where local financial regulators say it is banned. While fees are cheap and the number of products and cryptocurrencies on offer are high, Binance’s customers must bear the consequences. This risk turned into reality around July, 2021, when regulators from the U.K., Singapore, Canada, Germany, Japan, and Thailand all said they were unhappy with how the exchange operated. Several said that Binance (or local subsidiaries) were not licensed to operate there, and shortly thereafter Binance cut off customers from depositing and withdrawing funds in certain jurisdictions.
Gemini has taken the opposite approach. Six years after launching, Gemini lists just 49 coins—Binance lists 374. Gemini is also available in fewer jurisdictions and is far more expensive to use, and headquartered in New York (a stark contrast to Binance’s conspicuous lack of any global headquarters and Coinbase’s claim that it is “decentralized”). “We’re playing the long game,” Cameron Winklevoss, one of the founders of the exchange, told Bloomberg in July, 2021.
Gemini would argue that its advantage is that it is regulated through the nose, and customers that use its platforms are safe (Binance argues the same, but regulatory action suggests otherwise). Gemini is, for instance, licensed by the New York State Department of Financial Services, Wall Street’s toughest watchdog. And customer funds are insured to the tune of $290 million, plus the capital reserve requirements laid out by the New York State Department of Financial Services. It holds most of the funds in offline wallets (those that are not connected to the internet). It is also a fiduciary, and a SOC1 Type 2 certified exchange and custodian. Slow and steady is its pitch; in a 2019 ad campaign, Gemini called itself a “shelter in a storm” and its tagline today is “Trust is our product.”
This slow and steady approach has also prevented some of the growth that its competitors have experienced. Gemini is the 13th largest crypto exchange by volume, and on July 13 processed $127 million worth of trades. By contrast, volume on Binance hit $12 billion on the same day.
What else does Gemini do?
Gemini bought Nifty Gateway, a premium marketplace for crypto art in November 2019. These tokens, known as non-fungible tokens or NFTs, are unique cryptocurrency tokens that represent pieces of digital art. NFTs blew up in early 2021, and Nifty, run by another pair of twin brothers, Duncan and Griffin Cock Foster, helped Gemini rise to the top of the field by auctioning high-quality digital art. One of its most famous clients, a digital artist known as Beeple, managed to sell a collection of NFTs for $69 million in March. 2021, at the prestigious arthouse Christie’s. The Weeknd and Mick Jagger are among other clients of Nifty Gateway.
Gemini also has its own so-called stablecoin, the Gemini Dollar. This is an Ethereum-based cryptocurrency (known as an ERC-20) with a value pegged to the price of the U.S. dollar and backed by real U.S. dollars held by the Gemini Trust Company, the NYDFS-regulated custodian. With a market cap of$289 million as of July, 2021, GUSD is not as popular as other stablecoins, like Tether (USDT), the controversial stablecoin giant with a market cap of $62 billion, or USDC, the stablecoin created by a consortium founded by Circle and Gemini’s main U.S. competitor, Coinbase. USDC has a market cap of $26 billion. As of this writing, just $8.6 million of GUSD was traded in the past 24 hours. By contrast, $43 billion of Tether traded hands in the same time frame and $2.2 billion of USDC.
Gemini also offers other services. Several are targeted at asset managers and businesses—organisations that want to trade lots of cryptocurrency at a time. The exchange has its own clearing service, Gemini Clearing, for over-the-counter traders who want to settle trades off its main order book. Gemini confirms the transaction as a third party to speed things up and mitigate counterparty risk. Gemini custodied over $30 billion in crypto assets as of June 2021.
Others are open for retail traders—individuals. Gemini Earn offers returns of up to 7.4% on some cryptocurrencies; those rates are achievable on the decentralized U.S. dollar-pegged stablecoin, DAI, highly volatile meme coin Dogecoin (remember, 7.4% of a volatile currency is pointless if the value of the currency hits the floor in a single afternoon) and Gemini’s own Gemini Dollar. Interest-bearing accounts like these aren’t new; some unregulated and uninsured (i.e. riskier) platforms offer far higher rewards. Gemini plans to launch a crypto Mastercard credit card in the U.S. in summer 2021 that offers 3% cashback on dining, payable in cryptocurrency. The metal card comes with no annual fee but Gemini hasn’t confirmed which U.S. residents are eligible.
Is Gemini available in Canada?
One of Gemini’s biggest selling points is that it is legal in New York, meaning it is accessible to the coterie of big firms of Wall Street who want to get into crypto. Most of its marketing makes a big deal out of that. But it’s also available in Canada. In Canada, Gemini offers trading in 45 cryptocurrencies, including Bitcoin, Ethereum, and Dogecoin. It also supports seven fiat currencies (regular money): the Euro and the pound, and the Canadian, U.S., Australian, Hong Kong and Singaporean dollars.
Gemini wants to continue its overseas expansion on account of delays to U.S. regulation, which makes life tricky for crypto companies in the nation. “The U.S. will get there, but we can’t wait around for that,” Cameron Winklevoss told Bloomberg.
How much does it cost to trade on Gemini?
Fees on Gemini are highly variable. It depends how you place your transaction and on what platform. To keep things simple, this description will display fees in US dollars.
For transactions placed on Gemini’s mobile app or on its website, traders must pay a transaction fee plus a convenience fee. The transaction fee ranges from $0.99 for trades under $10 to $2.99 to trades under $200, then switches to 1.49% after that. Then comes a convenience fee of 0.5% for each trade. Gemini breaks it down like this: say you want to buy $100 of Bitcoin in USD, and Bitcoin’s worth $4,000. The app will quote you a sale at a price of $4,020 ($4,000 plus the 0.5% convenience fee), and then you’ll have to pay a $2.99 fee on that trade, meaning you’ll end up with 0.024 Bitcoin for $100.
Fees are cheaper if you trade on Gemini via an API—something usually reserved for professional investors. Fees are cut to 0.3% for takers, people that take trades off an orderbook (i.e. if you buy the Bitcoin a so-called ‘maker’ puts up for sale). This is comparable to Binance, which cuts fees to 0.1% for regular traders. Gemini waives fees entirely for huge orders. Most exchanges do this; huge traders are useful for keeping money flowing through the exchange. For large traders, Gemini also charges an annual custody fee of 0.4%.
Who created Gemini?
Gemini was founded in 2014 by two identical twins, Cameron and Tyler Winklevoss. (Gemini means twin in Zodiac speak). The brothers both went to Harvard in 2004 and later Oxford, and both rowed in the Olympics (they are also giants at 1.96m). At Harvard, they were close with Mark Zuckerberg, and claim that he stole the idea for what became Facebook from them; they settled in 2011 for $20 million and, in 2011 prices, $150 million in stock. (You can see more of them in the Facebook flick The Social Network). But the Winklevoss twins quickly forgot all about Facebook; they thought that Bitcoin was the next big thing. And so, in 2013, they bought $11 million worth of Bitcoin, according to the The New York Times. Since then, the value of Bitcoin has skyrocketed, and the twins are now billionaires.
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