The end of the encrypted premium? The market logic shifts in the aftermath of Gemini's listing
By Chloe, Challenger
In the second half of 2025, the encryption industry launched a wave of public booms, with Bullish and Gemini successively accessing the capital market, with a market value of billions of dollars. Markets generally believe that listing is the historic declaration of an encrypted exchange out of its barbarity and out of the mainstream, yet in just six months, reality offers a very different answer。
From a rise of more than 83 per cent in the first day of Bullish's listing, Gemini attracted 20 times the oversubscribement, to today's collapse in stock prices, layoffs, and peak compliance costs, this is not just an exchange's dilemma, but it points to a more fundamental problem: When the extrajudicial dividends of encrypted assets disappear, how much is left of the excess premium on traditional finance
Gemini, are you okay? It's worth 30%
On April 11, 2026, Bloomberg revealed the reality that the founders of Gemini, Tyler Winklevoss, and the Cameron Winklevoss brothers, were the last to face. Gemini's share price has dropped from $28 to about $5, evaporating more than 80 per cent above the market; the company recently lost 30 per cent of its staff and withdrew from multiple international markets, while three core executives, Chief Operator, Chief Finance Officer, and Chief Justice, also chose to split。
More problematic is the question of capital structure. One of the options under discussion was to request the Winkleworth brothers to waive the hundreds of millions of dollars they had borrowed through Winklevoss Capital Fund LLC, possibly by converting the debt into equity. At the end of December 2025, Gemini still had 4619 bitcoin outstanding debt, exceeding $330 million at current market prices。
The company currently has about 445 employees. The stock rebounded on a day-to-day basis, despite 9 per cent when a buyer negotiated for its closed overseas licence plates, but has fallen by more than 50 per cent since the beginning of the year. It is expected that these licences will not be more than a few million dollars in real terms due to the complexity and time-consuming nature of the transfer process, which is nothing more than a glass of water for an enterprise that lost $585 million last year。
The ruins after the party: the fall of the wave
To understand Gemini's plight, we have to go back to the encryption industry's public feast in the summer of 2025. On August 13, 2025, Bullish (New York Code: BLSH) completed the first public collection of $1.15 billion at $37 per share. On the first day of the roll-out, the stock price was over $100, ultimately at $68, more than 83 per cent higher than the issuance price, and the market value exceeded $10 billion. BlackRock and Ark Invest had claimed prior to taking shares with the intention to subscribe to shares worth up to $200 million, which was facilitated by the proliferation。
Less than a month later, Gemini, which had been listed in NASDAQ on 12 September, had issued a release price of $28, and the opening rate had risen to $37, with an overall increase of over 14 per cent and an overall valuation of $3.3 billion, attracting 20 times more over-subscriptions. During the same period, Circe, eToo, Figure Technologies also made successive visits to capital markets, and the discussion of "encrypted-listed windows open" took place。
The market review generally found that this was a declaration of the mainstream of a number of collapsed industries; however, it eventually gave completely different answers. Gemini opened the first day at $37 and then went down the road, eventually falling $5 in less than six months, counting a drop of more than 80 per cent from the top of the market; Bullish performed relatively well, but also fell back after bitcoin fell。
Heavy compliance: financial pressure due to higher fees for audit and legal advisers
Listing brings not only capital, but also a bill that continues to grow. Gemini earned only $6.79 million in the first half of 2025, while the net loss during the same period was $282 million. One of the central reasons for the increase in losses is the rapid escalation in the costs of regulation and compliance. The first quarterly report after the listing showed a net loss of $159.5 million in the third quarter, with high marketing and listing-related costs being the main drag, which could not be offset even if the current quarterly revenue doubled to $50.6 million from the previous period。
This is not a Gemini-specific dilemma, but a cost issue for the whole industry. According to CoinLaw, the average compliance cost for small and medium-sized encrypted enterprises increased from $620,000 in 2025 to approximately $760,000 per year in 2026, an increase of 22.5 per cent; the AML and customer identification (KYC) process accounted for 40 per cent of the compliance budget, the largest single cost, and many enterprises were forced to establish dedicated compliance services to meet compliance requirements。
For listed companies, the cost list will be doubled: audit fees, fees for legal advisers, regular compliance expenditures reported to the United States Securities and Exchange Commission (SEC), investor relations departments responding to institutional investors ' queries, and market pressure after quarterly financial disclosure. Even Coinbase, with its large size, faced $100 million in money-laundering and cyber-security compliance fines from the New York State Financial Services Authority (NYDFS), of which $50 million was a direct fine and $50 million was for overhauling inputs。
Gemini is a typical compliance priority strategy, with the “most compliant encryption exchange” as the core brand selling point. But ironically, it's the same strategy that makes bear markets more vulnerable than any competition: When the volume of transactions shrinks, revenues fall directly, but the cumulative compliance costs to maintain the listing are subject to significant financial pressures。
The structural depletion of the attraction of the mountain coin
On the other hand, Gemini’s dilemma is a microcosm of the transformation of the whole encrypted market, which is most visible in the Yamaya currency market. In the past, each round of cattle markets was almost standard-setting: after bitcoin was pushed up, funds spilled over to the Ether factory, then to Solana, and then to a variety of small market-market coins, creating a wave of wealth-transfer effects. This logic presupposes that “encrypted markets are a closed pool of liquidity” and that when funds enter, they can only rotate between different assets。
BUT IN 2025, THAT PREMISE WAS BROKEN. BY THE END OF 2025, THE GLOBAL ASSET MANAGEMENT OF THE PRODUCTS TRADED BY THE ENCRYPTED EXCHANGE (ETP) HAD REACHED NEARLY $180 BILLION, AND THE BITCOIN EXCHANGE TRADING FUND (ETF) HAD BECOME A CENTRAL ENTRY CHANNEL FOR INSTITUTIONAL FUNDS, WITH SOME EXCLUSIONARY EFFECTS ON THE YAMAKI CURRENCY. IN ADDITION, THE BITCOIN DOMINANCE RATE HOVERED AROUND 59 PER CENT THROUGHOUT 2025, AND THE TOTAL 2 INDEX OF THE TOTAL MARKET VALUE OF THE NON-BITCOIN ENCRYPTED MARKET FELL FROM $1.77 TRILLION AT A HIGH POINT IN OCTOBER TO $1.19 TRILLION IN DECEMBER, A DECLINE OF 32 PER CENT AND A BREAK IN THE 50-WEEK AVERAGE, WHICH WAS CRITICAL SUPPORT。
Despite successive approvals by solana, Ribbon (XRP), Dogcoin, Chainlink and others in 2025, financial inflows remain highly concentrated in Bitcoin and Ethera products, and the Yamatoco ETF has only broadened its options and has not substantially transferred its allocation. According to the director of the Global ETF for Assets Services at the Melon Bank (BNY) in New York, the Yamaya currency ETF “is unlikely to expand on the same scale because it is highly sensitive to the market cycle and demand will rise and fall as prices rise”。
In other words, institutional funds now have a “compulsive and low-distortive access” route, and they no longer need to take liquidity risks in secondary markets to buy Solana. On the other hand, the excess premium of the Yamashita coin, which had originated from its high frictions at the entry threshold and its high expectations of extrajudiciality, is likely to fade。
encryption concept unit vs
Another facet of this market shift is the substantial expansion of investor instruments. In 2021, an institutional investor who wanted to configure the encrypted market had very limited options: to buy currency directly, to buy Coinbase shares, or to buy a greyscale GBTC trust and to bear its long-term negative premium. By 2025, this list of options had been quite rich: Bitcoin in cash ETF, ETF in the Ethers, Strategy (MSTR), Bitmine (BMNR)..
THE GROWTH OF THE ENCRYPTION CONCEPT UNIT AND THE ETF HAS OBJECTIVELY PLAYED THE ROLE OF A MOBILE WATER PUMP. THE GLOBAL SCALE OF ENCRYPTED ETP ASSETS MANAGEMENT HAS REACHED NEARLY $180 BILLION, AND A SIGNIFICANT PROPORTION OF THE FUNDS HAVE BEEN DIVERTED FROM POTENTIAL POOLS THAT USED TO FLOW TO SHANYA CURRENCY, AND LARGE FUNDS HAVE ACCESS TO RISK EXPOSURES IN THE ENCRYPTED MARKET WITHOUT BEARING THE RISKS SPECIFIC TO THE TAIL OF THE BANKNOTES, SUCH AS TRANSPARENT AUDITS, CONTRACTUAL LOOPHOLES, AND DEPLETED LIQUIDITY。
As a result, the liquidity of the market has continued to deteriorate. Thin order bookings mean that any larger purchase and sale drive can generate sharp fluctuations, which in turn scares away institutional funds that require predictable liquidity and creates a vicious circle。
Where did the premium go after the extralegal dividend disappeared
It can be said that the “excess premium” of an encrypted asset has never been an unprovoked bubble and has real structural sources。
One is regulation of arbitrage premiums: a non-compliant exchange or project is naturally better structured than a compliance competitor because it does not have to bear regulatory costs. However, with the global convergence of compliance costs, the average compliance expenditure for small and medium-sized encryption enterprises has risen by 22.5 per cent in 2025 and the compliance staffing has continued to increase, and the margin is being eliminated. Both the listed Gemini and the unlisted small exchange are paying for the regulatory “entry fee”。
THE SECOND IS THE SCARCE PREMIUM ON LIQUIDITY: PARTICIPANTS IN THE ADVANCED ARENA NATURALLY ENJOY A SCARCE DIVIDEND WHEN THE ENCRYPTED MARKET REMAINS A SMALL ASSET WITH A VERY HIGH THRESHOLD OF ENTRY. HOWEVER, WITH THE SPREAD OF THE ETF AND THE INTRODUCTION OF THE ENCRYPTION CONCEPT, THE COST OF FRICTION OF ENTRY TO AN INSTITUTION HAS FALLEN SIGNIFICANTLY, AND THE PREVIOUS “OVER-REWARDS THAT ONLY GO TO THE SECONDARY MARKET” NO LONGER EXIST。
Gemini's dilemma is that it spent 10 years building “the most compliant encryption exchange” and cashing the brand into a market premium at exactly the right time. However, the post-market reality is that it enters a competitive environment in which “compliance is already the basic threshold rather than the differential advantage” and bears a higher fixed cost than any non-market rival。
For the market as a whole, the dividends that once underpinned the excess returns on encrypted assets are being absorbed by the market one by one. What remains is the real fundamentals: the actual use of the agreement, the depth of exchange liquidity, and the sustainability of institutional adoption. In a world closer to “traditional financial logic”, the era of narratives as a basis for valuation may have come to an end。
