Gemini raised $400M to become the financial gateway to the metaverse

The news: The US-based crypto exchange reached a $7.1 billion valuation, and it will use the funding to expand globally and facilitate access to the metaverse espoused by Meta (formerly Facebook). This is unsurprising—its founders, the Winklevoss twins, have an infamous rivalry with Zuckerberg.

What it’s appeal? Launched in 2015, Gemini has grown fast because it eases both retail and institutional investors’ exposure to cryptos.

• The exchange supports more than 60 cryptos and holds over $30 billion under custody thanks in part to expanding its services beyond trading.
• Gemini Earn, which lets users earn up to 7.4% APY by lending cryptos to institutional borrowers, has originated more than $4 billion in loans since its February launch. Gemini Credit Card, which will offer real-time crypto rewards, has a 360,000-person waiting list. And Nifty Gateway, the NFT marketplace it acquired in 2019, has processed more than $420 million in sales.
• Gemini stands out from competitors by taking a compliance-first approach to growth. It was the first regulated exchange in the US and one of the first five exchanges registered in the UK. Coinbase and others, meanwhile, are better known for finding themselves in the regulatory crosshairs.

Looking ahead: Despite the high valuation, Gemini has a smaller user reach than its crypto peers, which puts it at a disadvantage as they all race to become the financial gateway to the metaverse.

• Coinbase also plans to build out its crypto wallet beyond trading so users can interact with metaverse-linked products like DeFi solutions and NFTs. The exchange is starting in pole position: 61.8% of mobile phone users in the US and UK used Coinbase to buy cryptos as of March, compared with just 8% for Gemini. And its NFT marketplace’s waiting list, expected to launch before the end of this year, surpassed 1.5 million people within two days of being announced.
• FTX, which was founded two years after Gemini, reached an $18 billion valuation this summer and is also planning to expand its reach into the metaverse. And Consensys just raised $200 million to the same effect and can count on institutional backing from the likes of HSBC and JPMorgan.