Gemini In the third quarter, there was a rebound in trading, which masked the further weakening of the retail business.
The latest report from cryptocurrency exchange Gemini indicates that although the overall volume of crypto transactions has increased, its quarterly retail transaction volume has dropped to its lowest level in three years.
According to the Gemini third-quarter financial report, the total spot trading volume increased by 18% compared to the second quarter, reaching $4.5 billion. Institutional trading volume grew by 26% to $3.9 billion; retail trading volume, however, decreased by 14% to $600 million, marking the lowest level since the third quarter of 2023.
Gemini indicates that the growth in quarterly spot trading volume 'benefited from increased activity of institutions on Zcash, as well as the expansion of related market-making business,' but does not specifically explain the reasons for the decline in retail trading.
Despite the sluggish retail business, the revenue of Gemini exchange still increased by 7% compared to the previous quarter, reaching $13.4 million, due to a more than doubling of institutional business revenue. Retail traders remain the largest source of revenue for its exchange, contributing nearly three-quarters of the total income.
Cryptocurrency exchanges turn to predictive markets in search of growth
Several other crypto exchanges also reported weaker crypto trading activity in the most recent quarter.
Coinbase reports that both retail and institutional trading activities have slowed down, with consumer spot trading volume declining by 9% to $23.4 billion compared to the previous quarter. Coinbase Chief Financial Officer Alesia Haas stated, "The forecast for continued market growth helped offset the weaker crypto trading activities."
In terms of Robinhood, encrypted business revenue decreased by 55% year-on-year to $120 million, but event contract revenue increased sixfold to $173 million, which served as a counterbalance.
Gemini's own prediction trading platform, Gemini Predictions, also provided some assistance. The revenue of this business department increased by 52% month-on-month to $796,000, however, this amount is still not sufficient to offset the decline in other businesses.
Gemini seeks to expand its predictive market business
Gemini indicates that after entering the fourth quarter, market activity is expected to be even stronger, with the average number of traders in October being about 50% higher than the third-quarter average.
Nearly one-third of the new traders in the predictive market are Gemini new users, which is more than twice the proportion of the third quarter.
The company is also seeking to distribute its event contracts through other platforms. An non-binding agreement reached with Apex Fintech Solutions in August indicates that, subject to the conclusion of a final agreement, Gemini Titan will become the exclusive platform for Apex's futures brokerage business to distribute encrypted event contracts to its brokerage clients.
Gemini has scheduled a third-quarter financial report conference call for Friday.
