Citi’s downgrade sent shockwaves through Gemini’s stock on Wednesday, knocking the crypto exchange’s shares down more than 16% as analysts warned the firm may be years away from sustained profitability.
What happened
- Citi cut its rating on Gemini (Nasdaq: GEMI) from Neutral to Sell and slashed the price target from $13 to $5.50 in a note published Wednesday. At the time of writing GEMI was trading around $5.95, far below its $28 IPO price last September.
- Citi’s move wiped a chunk off the market value of the Winklevoss twins’ exchange and came ahead of Gemini’s scheduled fourth-quarter and full-year 2025 results, due Thursday, with a conference call planned for Friday.
Why Citi is bearish
- Analysts cited a long road to profitability for the exchange and custodian, a view that underpinned the downgrade and lower price target.
- The firm’s outlook also arrives amid a broader pullback in the crypto sector: Citi reduced its 12-month price forecasts for Bitcoin (from $143,000 to $112,000) and Ethereum (from $4,304 to $3,175) earlier in the week. At the same time Bitcoin and Ether were trading near $71,250 and $2,175 respectively—both down following worse-than-expected U.S. inflation data and geopolitical concerns related to Iran.
- Citi strategist Alex Saunders noted that the chance of major U.S. legislative action on crypto this year is waning, and the midterm elections could make passage of bills like the CLARITY Act more difficult—advancement would require support from at least seven Senate Democrats.
Gemini’s recent moves and background
- Founded by Cameron and Tyler Winklevoss in 2014 and launched in 2015, Gemini started as a Bitcoin trading venue and expanded into spot trading, derivatives, staking, institutional custody, an OTC desk, a stablecoin, and a crypto rewards credit card for retail and institutional clients.
- The company went public in September, pricing its IPO at $28 and raising about $425 million—implying a valuation near $3.3 billion at the time.
- Facing pressure to cut costs, Gemini announced in early February plans to exit the U.K., European Union and other European jurisdictions, as well as Australia. The wind-down gave affected users two months to withdraw funds before accounts are closed on April 6. The firm also reduced headcount by 25% and said it would lean on AI to boost efficiency—“Simplify, consolidate, then accelerate. Onward!” the Winklevoss twins wrote in a joint blog post.
Market sentiment and outlook
- Despite Citi’s bearish tilt and the downshift in analysts’ crypto price targets, some retail sentiment remains cautious-to-optimistic: users on Myriad, a prediction market run by Dastan (Decrypt’s parent), placed a roughly 55% chance that Bitcoin’s next move will be up to $84,000 rather than down to $55,000.
What to watch next
- Investors will be watching Gemini’s earnings release and the follow-up conference call for management’s latest revenue and margin trajectory, details on the regional wind-down and cost-savings progress, and guidance on when the company expects to reach profitability. Broader macro data, regulatory developments and ongoing geopolitical events will continue to influence crypto prices and investor appetite for exchange stocks.
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