Shares of crypto exchange Gemini fell below its IPO price. Are the papers overvalued?

Shares of cryptocurrency platform Gemini Space Station, founded by billionaire brothers Cameron and Tyler Winklevoss, on September 17 fell below the price of its IPO, which took place less than a week ago. The fall in the stock coincided with a decline in the quotes of other companies related to cryptocurrencies. However, analysts explain that Gemini's securities are also overvalued.

Shares of New York-based crypto exchange Gemini, founded by billionaire brothers Winklevoss, plummeted 12.8% to $24.5 at the close of trading on Wednesday. During the day, the price fell even lower - to $23.6.

As a result, the cost of Gemini securities was lower than the IPO price, which was held on September 12: the company placed securities at $28 each. On the first day of trading quotations grew sharply (up to $45.89 at the moment), but closed at $32 - 14% above the offering price. Since then, the securities have fallen by 23%.

During the IPO Gemini managed to raise $425 million at a valuation of $3.3 billion. The company's market capitalization is now estimated at about $2.9 billion.

Shares of Gemini's largest publicly traded competitor in the U.S., Coinbase Global, also fell 2.2% on Wednesday. At the same time, bitcoin cheapened by 1%. On the contrary, shares of Robinhood Markets, which also provides access to cryptocurrencies, strengthened by 1.1%.

Gemini recorded a net loss of $283 million in the first half of 2025 - compared to $159 million for the full year 2024. Revenue growth has slowed, making it challenging to maintain a high market value, Cryptorank writes.

In addition, according to Compass Point analyst Ed Engel, Gemini's securities are overvalued, the publication reports. The stock trades at a Price-to-Sales ratio (P/S) of 26, meaning investors are paying $26 for every dollar of revenue the company potentially generates this year. This is significantly above the average of both direct competitors (3.2) and the industry as a whole (4).

Such a ratio usually reflects expectations of rapid growth, profitability and sustainability of the business. However, for companies like Gemini, which are still unprofitable and lack a clear operating base, such a high valuation may be difficult to justify in the short term, Cryptorank explains. According to analysts' calculations, the fair value of the shares is $32.52 - above the current quotes, but below the peak, the publication notes.

Freedom Broker's pre-IPO estimate of the fair valuation of Gemini shares is $33.6, which is 37% higher than the current value. Freedom advised to buy the securities, but warned of risks. In particular, he noted that the company's revenue depends significantly on the volume of transactions with digital assets conducted on the platform. This volume, in turn, depends significantly on the price of digital assets. A decline in the value or volume of transactions would negatively impact GEMI's business, operating results and financial position, Freedom analyst Alem Bektemirov wrote. Competition is also a threat: Gemini competes with decentralized exchanges (DEX) and decentralized autonomous organizations (DAO), as well as companies such as Robinhood and Coinbase.

This article was AI-translated and verified by a human editor