• Gemini plans to launch prediction market contracts to expand its crypto offerings and attract new users.
• Regulatory approval from the CFTC is pending and may take months before Gemini can start trading contracts.
• Competitors like Kalshi Polymarket and Robinhood are already active making the market increasingly competitive.

Gemini, the cryptocurrency trading platform the Winklevoss brothers, Tyler and Cameron own, are in the process of launching prediction market contracts. Those sources close to the issue noted that the company has been trying to launch these products in the near future. 

The plan would position Gemini among several financial firms entering the growing field of prediction markets. These markets allow users to bet on outcomes of elections, sports events, and other real-world situations within a regulated structure.

Regulatory Efforts and Ongoing Review

In May, Gemini applied with the U.S. Commodity Futures Trading Commission to run a specified contract market. This approval is essential for running a derivatives exchange. The proposed exchange could serve as the platform for trading prediction contracts. The application is still under consideration and the approval of the application may take several months or even years. Any delays can happen when a government shutdown interferes with the federal operations.

The firm revealed plans for event contracts before its initial public offering in September. Gemini outlined potential markets covering sports, financial data, politics, and economic forecasts. The stock of Gemini at Nasdaq has dropped by close to 56% since its initial opening price of $37. On Tuesday, the stocks were trading at $16.29 which indicates investor uncertainty since the company will first release its earnings report on November 10. Moreover, the company filed with the SEC to list shares on the Nasdaq under the ticker symbol GEMI.

Competitive Landscape and Industry Momentum

The prediction market sector has witnessed strong growth driven by exchanges such as Kalshi and Polymarket. According to recent data, Kalshi reached $4.4 billion in trading volume in October, while Polymarket recorded $3 billion. Both platforms have attracted traders from traditional and crypto markets. Kalshi remains regulated by the CFTC, while Polymarket plans to resume U.S. operations soon.

Other platforms have also joined the trend. Robinhood began offering event contracts through a partnership with Kalshi. Large sports leagues, such as the National Hockey League, have gotten into multi-year deals with Kalshi and Polymarket through licensing. Such agreements are the initial partnerships between U.S. sports and prediction sites.

Challenges and Strategic Outlook

Despite rising interest, regulatory uncertainty still surrounds prediction markets. Some state gaming regulators have contested federal permissions, arguing that such products resemble gambling. The CFTC, however, has recently shown more openness toward viewing prediction markets as part of financial innovation.

Analysts note that Gemini’s move could help diversify its revenue and attract new users. Stiff competition with Coinbase and other established exchanges seeking similar contracts still presents a tough challenge to the company. In April, Coinbase Derivatives filed to launch XRP futures with CFTC approval. With better regulatory standards, the move by Gemini into this space might restructure it in the crypto space.

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