Gemini Seeks Entry into Prediction Market Sector

​Gemini Space Station (NASDAQ: GEMI), the cryptocurrency exchange, has applied to the Commodity Futures Trading Commission (CFTC) to establish a derivatives exchange. The company reportedly intends to offer prediction contracts, according to Bloomberg. The application is currently under CFTC review.

Gemini would compete with established platforms such as Kalshi, a CFTC-registered exchange, and Polymarket, which plans to re-enter the U.S. market. Kalshi reported a weekly volume of $1.2 billion between late October and early November, exceeding its previous record of over $1 billion. Polymarket has also surpassed $1 billion in weekly volume.

Other significant entities are also exploring the prediction market sector. IntercontinentalExchange, owner of the New York Stock Exchange, invested $2 billion in Polymarket at a $9 billion valuation. CME Group and Coinbase Global have announced plans for event contracts. MetaMask, DraftKings, and Sam Altman's World have integrated prediction market features.

Prior to its September public offering, Gemini indicated in securities filings its intent to launch event contracts covering economic data, financial markets, politics, and sports. The company raised $433 million in its IPO at a $4.4 billion valuation. Shares have since decreased by 40%. Gemini's IPO documents indicate ongoing financial losses and a small share of U.S. crypto trading volume. The company is scheduled to report its first public earnings on November 10.

A Needham analyst noted prediction markets could offer Gemini diversification beyond crypto. However, regulatory clarity remains a concern. The CFTC has permitted Kalshi to expand, but state gaming regulators have challenged the federal agency's authority in court.

Despite regulatory challenges, the industry has seen growth. Kalshi recently raised $300 million and operates in 140 countries. Trading activity continues to increase with new platform launches and mainstream financial firm participation.