With the MAGA halo, Gemini is about to land on the US stock market. The next question is: "Can the 'Trump traffic' still cover the financial black hole?"

As the Winklevoss twins boost their valuation ahead of their U.S. IPO with the influence of "MAGA," losses at Gemini (GEMI.US) continue to rise. From all perspectives, this should have been the crowning moment for Cameron and Tyler Winklevoss.

Last year, the camera-friendly billionaires and their crypto company Gemini found themselves in a politically unfavorable position, facing government investigations due to a collapsed lending product. However, the situation has seen a significant turnaround, with the twins becoming key players in the power link between the crypto industry and U.S. President Donald Trump's "MAGA" political camp. Now, the brothers are seizing the opportunity, planning to raise up to $433 million for Gemini through an IPO on the U.S. stock market later this week. The so-called MAGA refers to the Trump supporters rallying around the slogan "Make America Great Again."

However, this IPO reveals a less optimistic reality: despite the appearance of wealth and success, the 44-year-old brothers are still struggling to catch up with competitors and face ongoing difficulties in turning their decade-old company into a profitable enterprise.

According to the prospectus, this IPO will value Gemini Space Station Inc. at approximately $3.1 billion, less than half of the valuation from a funding round in 2021. The decline in Gemini's valuation comes as its largest U.S. listed competitor, Coinbase Global Inc., reaches new highs.

However, this heavily loss-making exchange only accounts for a tiny fraction of the trading volume in the U.S. cryptocurrency market— for instance, according to CoinGecko data, in recent days, the trading volume attracted by Coinbase was about 25 times that of Gemini. Moreover, Gemini has been relying on loans from the twins themselves; according to a person familiar with the business, they hold about 80% of the company's shares; this person requested anonymity as their economic interests were not disclosed in the IPO documents.

The contrast between public image and company performance speaks to a larger narrative logic about the cryptocurrency world in the Trump era: even if wealth, political connections, and a company's business fundamentals are almost unrelated, the company can still capture Trump's endorsement with the "MAGA" label and attract a flood of investor funds. This time, Gemini's listing will test how long the two can remain disconnected and whether the brothers can narrow the valuation gap.

Market share of U.S. cryptocurrency exchanges—Gemini's share of the U.S. crypto market is far less than that of major competitors.

"Clearly, they have a close relationship with 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 trading volumes."

Currently, CEO Tyler and President Cameron are doubling down on their political bets in the cryptocurrency space. In a relatively short time, they have transformed from regular Democratic donors to one 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 the Republican Party and "advocates of President Trump's crypto agenda," Tyler Winklevoss wrote on social media. He stated that their goal is to help Trump "usher in a golden age for America."

The Winklevoss brothers' donations to the Republican Party have surged—Political donation amounts from Cameron and Tyler Winklevoss.

According to the Bloomberg Billionaires Index, the pro-crypto policies enacted by the Trump administration have helped the brothers' substantial crypto asset portfolio appreciate, bringing their net worth to approximately $14 billion, a significant increase of about 60% since election day.

The regulatory climate has also created a favorable atmosphere for crypto market IPOs. Despite lackluster business metrics, Gemini's offering has been oversubscribed, and media reports on Tuesday indicated that the company has raised its expected price range for public share sales on Thursday afternoon. This week, Gemini stated in a filing that its Nasdaq listing (proposed stock code: GEMI) will involve a $50 million private investment.

Crypto "Convert"

The Winklevoss brothers were among the first public figures to openly declare themselves Bitcoin investors a few years after rowing together at the Beijing Olympics.

They first learned about the digital currency in 2012 during a chance encounter on Ibiza Beach. At that time, the price of each Bitcoin was less than $10, and they had just profited significantly from a legal lawsuit against Mark Zuckerberg regarding their role in the creation of Facebook. They set out to purchase 1% of all circulating tokens, and when they made this public in 2013, the purchase was worth about $11 million.

With a private reserve now worth billions, they founded Gemini the following year. In 2021, they raised $400 million in a funding round, bringing the company's valuation to $7.1 billion.

In earlier years, the brothers strongly advocated the importance of working with regulators during a campaign sloganed "Revolution Needs Rules." Gemini was one of the first cryptocurrency companies to obtain a license in New York State.

Then came the collapse of FTX and the subsequent market crash in 2022. Gemini, along with its lending partner Genesis, offered a product similar to a high-yield savings account, providing returns on customers' crypto deposits. When Genesis went bankrupt, about $1 billion in customer tokens were frozen Lawsuits and regulatory investigations followed one after another.

Users of the project named Gemini Earn ultimately received full compensation. Gemini reached a $50 million settlement agreement with the New York Attorney General, neither admitting nor denying any wrongdoing. However, the two brothers have become more critical of regulators and the Biden administration.

"The previous administration was threatening their livelihoods, threatening their business," said John Deaton, a Republican who had previously supported the twins in their 2024 challenge against Massachusetts Senator Elizabeth Warren, which ultimately failed.

"Male Models"

For the brothers, June 2024 was a turning point when they attended a Trump fundraising event hosted by David Sacks for about 100 people in San Francisco. Sacks, who now serves as the president's director of AI and crypto affairs, later recalled that the appearance-conscious Trump quickly noticed the brothers, who were comparable to "male models."

"He picked you out," Sacks told the two brothers during a fireside chat earlier this year.

"I know you really created Facebook," Sacks recalled the president saying to 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 two brothers soon became significant donors to the Republican Party, contributing so much to Trump's re-election campaign—up to $1 million each—that some of the funds were returned to avoid violating campaign donation rules.

In a now-famous pro-crypto speech in July, Trump specifically thanked the two brothers, calling them "male models with huge and beautiful brains."

Like many others in the crypto space, the brothers immediately benefited after Trump took office. The U.S. Securities and Exchange Commission notified Gemini in February that it would end its investigation into the company (although it was still seeking a resolution to 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 people" like them.

Unlike some in the crypto space who try to maintain bipartisan relationships, the brothers have fully committed to the "Trump MAGA team." According to a knowledgeable source, they purchased shares in the cryptocurrency mining company American Bitcoin, which is led by Eric Trump as Chief Strategy Officer; and paid $500,000 to join Executive Branch—a new social club aligned with MAGA, whose founding members include Donald Trump Jr., Sacks, and prominent lobbyist Jeff Miller.

Their new political influence was highlighted in a recent effort to derail the nomination of Brian Quintenz as chairman of the Commodity Futures Trading Commission (CFTC).

According to previous media reports, the brothers had requested the White House to stop or delay Quintenz's confirmation process, citing his insufficient faith in cryptocurrency. Industry insiders believe their efforts may be one reason why a Senate committee suspended the nomination vote for Quintenz in July and has yet to reschedule it The White House reaffirmed its support for Quinton after a brief delay. A spokesperson for the White House did not respond to requests for comment. Quinton declined to comment.

Gemini's Huge Losses

Despite Trump's policies boosting the personal wealth of the two brothers, it seems to have done little to help Gemini turn a profit.

In the first half of this year, the company reported a net loss of $282.5 million, nearly seven times that of the same period last year. Despite having a relatively long history in the industry, Gemini still struggles to catch up with larger competitors. According to Kaiko, during the crypto boom in 2021, its market share in U.S. trading was only 3%, and for most of the following three years, it remained below that level until it suddenly surged in the months leading up to the IPO.

The exchange's main revenue still comes from trading fees. However, over time, its business has expanded to include an online marketplace for non-fungible tokens (NFTs), credit cards that reward users with cryptocurrency, and its own stablecoin pegged to the value of the U.S. dollar.

Despite rapid growth in the rest of the stablecoin market over the past year, data from CoinGecko shows that the market capitalization of Gemini's own stablecoin GUSD has nearly halved. Additionally, the derivatives trading that the company has long promoted has seen little traction. In recent days, its open contract size was less than one-thousandth of that of the largest exchange, Binance, according to CoinGecko statistics.

The company's lagging trading volume may partly be attributed to the fact that, according to CoinGecko, Gemini only trades 84 types of cryptocurrencies, while Coinbase trades 317 and Kraken trades 495. It has also been slower to launch some new products— for example, it does not have its own proprietary blockchain like Coinbase and Kraken.

Matthew Hougan, Chief Investment Officer of crypto asset management firm Bitwise, stated that Gemini's adherence to regulations in a stricter regulatory environment before Trump's presidency may have slowed its progress.

"I suspect the company's pro-regulation stance has cost it growth opportunities," Hougan said. "Companies that have taken a more aggressive market strategy have gained market share."

Documents submitted by the company before the IPO show that as of the end of June, the company had liabilities of $1.5 billion—almost equivalent to its expected market value—much of which comes from the family office of the two brothers and other related parties.

In recent filings, Gemini stated that it would use the funds raised through the IPO for "general corporate purposes" and to repay some "third-party debts."

Some industry observers question whether this IPO is merely a way for the two brothers to recoup some of their investments.

"I would be more optimistic if they shared some elements of their strategic plans," said Campbell Harvey, a finance professor at Duke University. "Why do they need to raise capital? Is this just a liquidity event for existing owners?"

The two brothers hold all of the company's Class B shares, which have ten times the voting power of the common stock marketed to IPO investors. According to the amended registration statement, this gives them a combined 97% voting power in Gemini before the IPO Regarding the upcoming IPO, retail investors' enthusiasm for cryptocurrency companies may not be concerned with the business details. Another exchange, Bullish, soared over 80% after its listing in August, making its two major shareholders billionaires—although the stock price has since retreated. Gemini allocated an unusually large portion of this IPO—about 30%—to brokerage platforms like Robinhood that are popular with retail investors.

At a Bitcoin conference earlier this year, shortly after their visit to the White House, Cameron Winklevoss remarked to his brother that the world had changed significantly in just one year. "A year prior, you were more likely to think you would end up in prison rather than the White House," he joked