As the Winklevoss brothers leverage their "MAGA" influence to boost valuations ahead of their US IPO, Gemini Space Station, Inc. (GEMI.US) faces mounting losses.
By all accounts, this should be Cameron and Tyler Winklevoss's coronation moment. Last year, the photogenic billionaire twins and their crypto company Gemini found themselves in political hot water, facing government investigations over a collapsed lending product. The tide has turned dramatically, with the twins now positioned as key players in the power nexus between the crypto industry and President Donald Trump's "MAGA" political movement.
The brothers are now riding this wave, planning to raise up to $433 million for Gemini through an initial public offering on the US stock market later this week. MAGA refers to Trump's fervent supporters rallying behind the "Make America Great Again" slogan.
However, this IPO reveals a less optimistic reality: despite all the trappings of wealth and success, the 44-year-old brothers continue struggling to catch up with competitors and face ongoing difficulties in transforming their decade-old company into a profitable enterprise.
According to the prospectus, the IPO values Gemini Space Station Inc. at approximately $3.1 billion, less than half the valuation from a 2021 funding round. Gemini's market cap decline comes as its largest publicly traded US competitor, Coinbase Global Inc., hits new highs. Yet this loss-making exchange handles only a tiny fraction of crypto trading volume in the US market—for instance, according to CoinGecko data, Coinbase recently attracted roughly 25 times Gemini's trading volume.
Gemini has relied on loans from the brothers themselves, who hold approximately 80% of the company according to a person familiar with the business. This person requested anonymity as their financial interests are not disclosed in IPO documents.
The contrast between public image and corporate performance tells a broader crypto narrative about the Trump-era cryptocurrency world: even when wealth, political connections bear little relation to a company's business fundamentals, the company can still capture Trump endorsements through "MAGA" branding and attract a flood of investor capital.
This time, Gemini's listing will test how long this disconnect can persist and whether the brothers can close the valuation gap.
"Obviously they have close ties to the Trump family," said Markus Thielen, CEO of 10x Research, in an interview. "But I don't see how that necessarily helps them. It's primarily an exchange. For exchanges, you need to drive higher volumes."
Currently, Tyler serves as CEO while Cameron holds the president role, and they continue doubling down on crypto's political shift. In relatively short order, they transformed from routine Democratic donors into some of Trump's staunchest supporters.
In late August, the twins donated $21 million worth of bitcoin to a new political action committee called the "Digital Freedom Fund," which will support Republicans and "advocates of President Trump's crypto agenda," Tyler Winklevoss wrote on social media. He stated their goal is helping Trump "usher in a golden age for America."
According to the Bloomberg Billionaires Index, Trump administration-friendly crypto policies have already helped boost the brothers' massive crypto holdings, bringing their net worth to approximately $14 billion, a roughly 60% surge since election day.
The regulatory climate has also created favorable conditions for crypto IPOs. Despite underwhelming business metrics, Gemini's offering is reportedly oversubscribed, and the company raised its expected price range for Thursday afternoon's public stock sale.
Gemini stated in a filing this week that Nasdaq (proposed ticker: GEMI) will make a $50 million private investment in the company upon listing.
**Crypto "Converts"**
The Winklevoss brothers became among the first public figures to openly invest in bitcoin years after their Olympic rowing partnership. They first learned about the digital currency during a chance encounter on an Ibiza beach in 2012, when bitcoin traded below $10 per coin, shortly after profiting handsomely from their legal battle with Mark Zuckerberg over their role in Facebook's creation.
They set out to purchase 1% of all circulating tokens, worth approximately $11 million when they disclosed this in 2013. With their private reserves now valued in the billions, they founded Gemini the following year.
In 2021, they raised $400 million in a funding round valuing the business at $7.1 billion. In earlier years, the brothers heavily promoted working with regulators through a campaign with the slogan "Revolution Needs Rules." Gemini was among the first crypto companies to obtain a New York state license.
Then came FTX's collapse and the ensuing 2022 market crash. Gemini partnered with lending partner Genesis to offer a high-yield savings account-like product providing returns on customers' crypto deposits. When Genesis went bankrupt, approximately $1 billion in customer tokens were frozen. Lawsuits and regulatory investigations followed.
Users of the program called Gemini Earn ultimately received full compensation. Gemini reached a $50 million settlement with the New York State Attorney General, neither admitting nor denying wrongdoing. But the brothers' attitude toward regulators and the Biden administration became more critical.
"The last administration was threatening their livelihood, threatening their business," said John Deaton, a Republican whom the twins supported in his unsuccessful 2024 Senate challenge against Massachusetts Senator Elizabeth Warren.
**"Male Models"**
For the brothers, June 2024 marked a turning point when they attended a Trump fundraiser hosted by David Sacks in San Francisco for about 100 people. Sacks, now serving as Trump's AI and crypto czar, later recalled that the famously appearance-conscious Trump quickly noticed the "male model"-caliber brothers.
"He picked you guys out," Sacks told the brothers during a fireside chat earlier this year. "I know you guys really created Facebook," Sacks recalled the president telling them. "I know you didn't win that lawsuit, but that's okay. Because you got a lot of cards. You're very wealthy. Very handsome."
The brothers quickly became major Republican donors, contributing so much to Trump's reelection campaign—up to $1 million each—that some funds were returned to avoid violating campaign contribution rules.
In July's now-famous pro-crypto speech, Trump specifically thanked the brothers, calling them "male models with big, beautiful brains."
Like many other crypto insiders, the brothers immediately benefited after Trump took office. The SEC notified Gemini in February that it would end its investigation into the company (though still seeking to resolve an SEC lawsuit). Less than a month later, the brothers attended a crypto summit at the White House with the president, beaming as Trump nodded to "high-IQ individuals" like themselves.
Unlike some crypto insiders trying to maintain bipartisan relationships, the brothers have fully committed to "Team Trump MAGA." According to a knowledgeable source, they purchased shares in crypto mining company American Bitcoin, where Eric Trump serves as chief strategy officer, and paid $500,000 to join the Executive Branch—a new MAGA-adjacent social club whose founding members include Donald Trump Jr., Sacks, and prominent lobbyist Jeff Miller.
Their new political influence was highlighted in recent efforts to derail Trump's nomination of Brian Quintenz as CFTC chairman. The brothers reportedly asked the White House to halt or delay Quintenz's confirmation process, citing insufficient crypto devotion. Industry observers believe their efforts may have contributed to a Senate committee suspending Quintenz's nomination vote in July without rescheduling.
The White House reaffirmed support for Quintenz after a brief delay. A White House spokesperson did not respond to comment requests. Quintenz declined to comment.
**Gemini's Massive Losses**
While Trump's policies have boosted the brothers' personal wealth, they seemingly haven't helped Gemini achieve profitability. The company posted a net loss of $282.5 million in the first half of this year, nearly seven times the same period last year.
Despite its relatively long industry history, Gemini struggles to catch larger competitors. According to Kaiko data, during the 2021 crypto boom, it held just 3% market share in US trading, remaining below that level for most of the subsequent three years before suddenly surging in recent months ahead of the IPO.
The exchange's primary revenue still comes from trading fees. Over time, its business has expanded to include an online marketplace for non-fungible tokens (NFTs), crypto-rewards credit cards, and its own dollar-pegged stablecoin.
Despite rapid growth in other stablecoins over the past year, Gemini's GUSD stablecoin has nearly halved in market cap according to CoinGecko data. The company's long-pursued derivatives trading has gained little traction. Its open interest recently measured less than one-thousandth of top exchange Binance's, according to CoinGecko.
The company's lagging volumes may partly stem from trading only 84 crypto tokens compared to Coinbase's 317 and Kraken's 495, according to CoinGecko. It has also been slower launching new products—for instance, lacking proprietary blockchain infrastructure like Coinbase and Kraken.
Matthew Hougan, chief investment officer at crypto asset manager Bitwise, suggests Gemini's rule-following stance may have slowed progress under the pre-Trump administration's stricter regulatory environment.
"I suspect the company's pro-regulatory stance cost it growth opportunities," Hougan said. "Companies taking more aggressive market strategies won market share."
Pre-IPO filings show the company carried $1.5 billion in debt as of June—nearly equivalent to its expected market cap—much of it from the brothers' family office and other related parties. Gemini stated in recent filings it will use IPO proceeds for "general corporate purposes" and repaying some "third-party debt."
Some industry observers question whether the IPO simply provides a way for the brothers to recoup some investments.
"I'd be more optimistic if they shared some elements of strategic plans," said Campbell Harvey, a Duke University finance professor. "Why do they need to raise capital? Is this just a liquidity event for existing owners?"
The brothers hold all Class B shares, carrying 10 times the voting power of common shares marketed to IPO investors. According to revised registration statements, this gives them a combined 97% voting control of Gemini pre-IPO.
For the upcoming IPO, retail investor enthusiasm for crypto companies may overlook business details. Another exchange, Bullish, surged over 80% after August listing, making its two major shareholders billionaires—though shares have since retreated.
Gemini allocated an unusually large portion—about 30%—of its IPO to retail-focused brokerage platforms like Robinhood.
At a bitcoin conference earlier this year, shortly after their White House visit, Cameron Winklevoss reflected to his brother on how dramatically things had changed in just one year.
"A year before that, you were more likely to think you were going to prison than the White House," he joked.