Tyler Winklevoss says he’s “optimistic.” His exchange just cut a quarter of its staff, shed three C-suite executives in two weeks, and the family investment firm sold half its Bitcoin stack.
The gemini troubles came into sharp relief Tuesday when an SEC filing revealed operating expenses ballooning to $530 million against projected revenue of $175 million max. That’s a $355 million gap. Gemini’s market share collapsed from 0.6% in June 2025 to 0.1% by January. Market value fell from nearly $4 billion to under $700 million since the public listing last year.
On-chain data tells the other half of the story. Arkham Intelligence tracked the Winklevoss Capital wallet dropping from roughly 23,000 BTC in February 2025 to fewer than 11,000 BTC by February 2026. That’s 12,000 Bitcoin sold over 12 months—worth around $500 million at current prices. Original cost basis unknown, but the timing matters. Steady selling through a bear market while Tyler posted bullish commentary.
**The Leadership Exodus**
Gemini announced on February 5 it would eliminate up to 25% of staff and exit the UK, European Union, and Australia entirely. The company said it would concentrate on US and Singapore markets going forward. Less than two weeks later, the chief operating officer, chief financial officer, and chief legal officer all departed. Cameron Winklevoss absorbed many COO duties while interim executives filled the CFO and general counsel roles, according to the company’s 8-K filing.
Bloomberg reported Sunday that additional US layoffs followed, though Gemini hasn’t confirmed numbers. Sources told Bloomberg the company is pivoting hard toward a CFTC-regulated prediction markets platform plus custody and credit card services. That’s a dramatic shift from spot trading, which generated the bulk of historical revenue.
The gemini troubles reflect broader exchange consolidation. Binance and Coinbase dominate global spot volume. Mid-tier platforms face a choice: find a niche or die. Gemini picked its niche—regulated financial products that require licensing moats competitors can’t easily replicate. Question is whether the pivot happens fast enough to stop the cash burn.
**The Revenue Problem**
Gemini’s SEC filing showed 600,000 monthly transacting users in 2025, up 17% year-over-year. Net revenue climbed from $141 million in 2024 to an expected $165-175 million range for 2025. That’s growth. But operating expenses exploded from $308 million to $520-530 million in the same period. The cost structure isn’t sustainable at current revenue levels.
Exchanges live and die on volume. When market share shrinks to 0.1%, fixed costs become fatal. Gemini needed to cut or pivot. It did both. The layoffs reduce burn rate. The strategic shift toward prediction markets and custody aims for higher-margin business lines where competition is thinner and regulatory approval creates barriers to entry.
Winklevoss Capital’s Bitcoin sales add another dimension. Selling 12,000 BTC over 12 months suggests either liquidity needs or a directional bet. If Gemini needed cash to fund operations or avoid dilutive fundraising, the sales make sense. If it was a market call, the timing was early—Bitcoin fell further after most of the selling.
**Market Context**
The gemini troubles coincide with the worst crypto sentiment since 2022. US spot Bitcoin ETFs bled outflows for five consecutive weeks heading into this report. The Crypto Fear & Greed Index hit extreme fear levels. Google searches for “Bitcoin going to zero” reached their highest point since 2022, when Bitcoin traded below $16,000.
Miners like Bitdeer liquidated BTC treasuries to survive. Most mid-tier platforms retrenched. A handful of players moved the opposite direction. Japan’s Metaplanet kept buying Bitcoin despite market conditions. Strategy, the largest public Bitcoin holder with 717,131 BTC, hinted at its 100th purchase on Sunday. BitMEX co-founder Arthur Hayes posted his portfolio Monday showing heavy BTC weighting alongside gold and oil. Macro analyst Lyn Alden remains long but expects a grinding market rather than sharp recovery.
The divide separates those with access to capital from those burning through it. Strategy raises equity and debt against its Bitcoin holdings to buy more. Gemini burns $355 million annually at current projections. One group accumulates. The other liquidates.
**The Contradiction**
Tyler Winklevoss called himself “optimistic” even as the gemini troubles mounted. That’s either conviction or marketing. CEOs rarely admit defeat in public statements, especially when trying to retain users and employees through restructuring. His optimism might be genuine—contrarian positioning when sentiment hits extremes often marks bottoms. Or it might be damage control.
The data suggests damage control. Companies that cut 25% of staff, lose their entire C-suite, exit multiple continents, and sell half their Bitcoin position aren’t executing from strength. They’re surviving. Survival isn’t bearish long-term if the pivot works. But it’s not the growth story Gemini investors expected when the company went public at a $4 billion valuation.
Gemini’s restructuring mirrors what happened to exchanges after previous bear markets. Mt. Gox collapsed. Bitfinex survived by pivoting. Kraken retrenched to core markets. Gemini is attempting the Kraken playbook—cut costs, focus geographically, find regulated niches competitors can’t easily enter. The prediction markets bet is interesting. If CFTC approval creates a moat, Gemini could own a growing category. If the pivot takes too long, the cash runs out first.
**What Happens Next**
Gemini needs the prediction markets platform launched and generating revenue before the $355 million annual burn rate drains remaining capital. The company hasn’t disclosed how much runway it has, but the urgency of cuts suggests less than two years at current burn. Cameron Winklevoss taking on expanded duties might speed execution by eliminating layers, or it might signal they couldn’t afford to replace the departed executives.
The Winklevoss Capital Bitcoin sales raise separate questions. If the wallet holds fewer than 11,000 BTC after selling 12,000, that’s roughly $600 million in remaining exposure at $55,000 per coin. Does the selling continue? Or was this a one-time liquidity raise to fund Gemini’s pivot? The next few months of on-chain data will answer that.
For now, one thing is clear: optimism and survival mode aren’t mutually exclusive. Tyler Winklevoss can believe in Bitcoin’s long-term future while simultaneously restructuring the exchange to outlast the present. The gemini troubles test whether the company executes the pivot before the market recovers. If crypto rallies before the cash runs out, Gemini survives with a leaner cost structure. If the bear market drags another 18 months, the math gets ugly.
All eyes on the prediction markets launch.
