Gemini Crypto Exchange Bets Big on Prediction Markets

Gemini, the cryptocurrency exchange co-founded by Cameron and Tyler Winklevoss, is set to enter the fast growing world of prediction markets. Bloomberg reported on Tuesday that the company has held internal discussions about launching products in this space at the earliest opportunity. This development comes as Gemini navigates its recent transition to a publicly traded entity on the Nasdaq Global Select Market.

The crypto exchange completed its initial public offering in September, pricing shares at $28 each and achieving a valuation exceeding $3 billion. Such a move shows Gemini's strategy to diversify beyond traditional spot trading in digital assets. By targeting prediction markets, the firm aims to capitalize on a sector that blends crypto innovation with event-based financial instruments.

Prediction markets allow users to wager on the outcomes of real-world events, from elections to economic indicators, through contracts that function as derivatives. These platforms have seen explosive interest, particularly among crypto enthusiasts who value decentralized and transparent betting mechanisms. Gemini's entry would position it to leverage its established user base in this evolving landscape.

Prediction Markets Gain Momentum Post Election Surge

The sector's rapid ascent traces back to the 2024 U.S. presidential election, where platforms like Polymarket and Kalshi emerged as frontrunners. Over $8 billion in bets flowed through Polymarket alone during the campaign, highlighting the public's appetite for participatory forecasting. This volume not only validated the model's accuracy in aggregating collective wisdom but also drew regulatory scrutiny and investor capital.

Trading activity on these platforms has since eclipsed those election peaks, with recent data showing sustained highs through late 2025. Kalshi, a CFTC-regulated exchange, recently secured over $185 million in funding at a $2 billion valuation, reflecting broad confidence in the space's longevity. Polymarket continues to dominate crypto-native trading, offering blockchain-based contracts that appeal to a global audience seeking alternatives to conventional bookmakers, and is preparing to relaunch in the U.S. soon.

Gemini's entry into prediction markets will require clearing significant regulatory barriers. As derivatives tied to future events, prediction contracts fall under the U.S. Commodity Futures Trading Commission's oversight. Gemini has reportedly filed an application with the agency, a process that typically spans several months due to rigorous reviews for market integrity and consumer protection.

The CFTC's stance has evolved in recent years, shifting from prohibitions under prior administrations to more permissive frameworks that recognize the tools' informational value. For Gemini, approval would mark a pivotal expansion, potentially boosting its revenue streams amid competitive pressures in core crypto trading. According to Bloomberg, sources familiar with the discussions emphasized the urgency, noting that internal teams are preparing to roll out offerings promptly upon greenlighting.

This foray could reshape how cryptocurrency exchanges engage users beyond buy-and-hold strategies. Prediction markets offer a dynamic way to hedge risks or speculate on macro trends, all while embedding blockchain's efficiency.