Gemini's Institutional Custody Tradeoff

Gemini is paying real money to be the exchange that large institutions can actually clear with. A New York trust charter means Gemini has to run more like a bank custodian than a fast moving offshore venue, with segregated assets, audits, cold storage, and heavier oversight. That raises headcount, legal, compliance, and operations costs, but it also makes Gemini usable for hedge funds, banks, and other clients that need a qualified custodian and tighter controls.

• The tradeoff shows up in economics. In H1 2025, 87% of Gemini's volume came from institutions and revenue still fell to $68.6M as blended take rate dropped to 0.18%. Gemini is winning lower fee, higher trust flow, not high margin retail flow.
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• Offshore exchanges compete differently. Binance built scale on broader listings, fewer product constraints, and giant liquidity pools, while Gemini limited product scope to stay inside stricter U.S. style guardrails. That lets offshore venues move faster on new coins and trading features, often with lower fees.
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• Kraken is the closest U.S. comparable, but Gemini leans furthest into custody and institutional safety. Kraken is larger, with estimated 2025 revenue of $2.2B, while Gemini remains much smaller and more concentrated in big block trading and custody linked services like staking, card interchange, and reserve yield.
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This is heading toward a split market. Offshore venues will keep winning on speed, token breadth, and pricing, while Gemini tries to own the part of crypto that looks more like prime brokerage, custody, and regulated dollar settlement. If institutions keep taking a larger share of crypto volume, Gemini's heavier structure becomes less of a drag and more of the product itself.