Gemini credit card revenue triples—but transaction losses jump 467%

Gemini’s credit card became its largest individual revenue source in the second quarter, overtaking the company’s crypto trading business as card use increased.

The growth came with much higher costs. Transaction losses jumped 467%, while trading volume and assets held on Gemini’s platform fell sharply during the quarter.

Gemini generated $45.5 million in total revenue, up 37% from a year earlier, and its net loss narrowed from $133.2 million to $107.7 million.

Credit card growth comes at a cost

Credit card revenue more than tripled to $16.2 million, surpassing the $12.5 million Gemini generated from exchange trading.

The company said the increase was due to more customers using the card and higher spending among cardholders, but losses from transactions increased from $3.5 million to $20.1 million.

Most of the losses came from the credit card business, and other losses involved payments and older staking-related balances. Gemini set aside $16.1 million for expected card losses, compared with just $1.7 million a year earlier.

The company also found more fraudulent accounts linked to a group it first identified during the previous quarter. 

Meanwhile, the cost of credit card rewards nearly tripled from $2.9 million to $8.2 million.

Gemini’s crypto business shrinks

The picture was considerably weaker on Gemini’s exchange, as trading volume dropped from $11.3 billion to $3.8 billion, driven largely by a decline in institutional activity. Institutional volume fell from $9.8 billion to $3.1 billion, and exchange revenue consequently declined 38%, while custody revenue fell 67%.

The value of assets held on Gemini also dropped from $18.2 billion to $8.4 billion, and Gemini attributed the custody decline to lower crypto prices and customers withdrawing assets.

But the number of monthly transacting users increased 11% to 580,000.

OTC revenue also increased from $611,000 to $4.7 million after several large client transactions, although Gemini cautioned that this level of activity may not continue.

The filing further showed that Gemini sold some Bitcoin received through a $100 million private placement to fund operations and other initiatives. But it retained 988 BTC, worth $57.9 million at the end of June.

Final Summary

• Gemini’s credit card became its biggest individual revenue source, but card-related losses and rewards costs climbed sharply.
• Crypto trading volume, custody revenue and assets held on the platform all fell during the quarter.