The class of 2025 crypto exchange IPOs is imploding. Gemini Space Station, which raised $425 million at a $3.3 billion valuation just five months ago, now trades at $6.38 — down 79% from its IPO price. Its entire C-suite departed on February 17. Circle Internet Group has cratered 70% from its all...
"We're investigating whether, at the time of its IPO, Gemini knew of adverse trends that within a few months required massive layoffs in the international operations which the company had said would serve as a robust foundation for sustained growth." — Reed Kathrein, Partner, Hagens Berman
The class of 2025 crypto exchange IPOs is imploding. Gemini Space Station, which raised $425 million at a $3.3 billion valuation just five months ago, now trades at $6.38 — down 79% from its IPO price. Its entire C-suite departed on February 17. Circle Internet Group has cratered 70% from its all-time high. Bullish, Peter Thiel's crypto exchange, has lost more than half its value since listing. Even Coinbase, the elder statesman of public crypto companies, is down 38% year-over-year with revenue falling 22% quarter-on-quarter.
These are not isolated stumbles. Bloomberg reports that crypto exchange stocks have collectively suffered losses exceeding 55%, driven by a retail exodus that has cut spot trading volumes nearly in half — from $1.7 trillion in January 2025 to roughly $900 billion in January 2026. The question facing investors is no longer whether crypto exchanges can survive a bear market, but whether the exchange IPO thesis was fundamentally mispriced from the start.
Meanwhile, Kraken is pressing ahead with a Q1 2026 IPO at a $20 billion valuation, backed by Citadel Securities and Jane Street. Whether this represents institutional conviction or peak-cycle hubris will define the next chapter of crypto's relationship with public markets.
The 2025 crypto IPO wave was supposed to mark the industry's graduation into mainstream finance. After years of regulatory uncertainty, the SEC's more collaborative posture and a bitcoin rally past $100,000 created a window that exchanges rushed to exploit. The results, six months later, tell a different story.
| Company | Ticker | IPO Price | IPO Raise | Current Price | Change | |---------|--------|-----------|-----------|---------------|--------| | Circle Internet Group | CRCL | $31 | — | ~$50 | -70% from ATH ($299) | | Gemini Space Station | GEMI | $28 | $425M | $6.38 | -79% | | Bullish | BLSH | — | $1.1B | — | -52% | | Coinbase Global | COIN | — | — | $164 | -38% YoY |
Bullish, backed by Peter Thiel, had a spectacular first day — surging 176% to a $15 billion market cap — before reality set in. Circle, the issuer of USDC, touched nearly $300 before collapsing to its all-time low of $49.90 on February 5, 2026. Every single crypto exchange that went public in 2025 is now underwater relative to its peak, and most are deep below their IPO prices.
The pattern is consistent: euphoric debut, brief honeymoon, then a grinding decline as trading volumes evaporate and the bear market exposes the cyclicality that IPO prospectuses glossed over.
No company better illustrates the crypto IPO reckoning than Gemini Space Station. The Winklevoss twins' exchange went public on September 12, 2025, opening at $37.01 — a 32% premium to its $28 IPO price. Morningstar called it "double trouble for crypto naysayers." The company projected international expansion as "a robust foundation for sustained growth."
Five months later, the foundation has collapsed:
February 5, 2026: Gemini announced the shutdown of operations in the U.K., European Union, and Australia. Customer accounts enter withdrawal-only mode on March 5. The company cut 25% of its global workforce — approximately 200 jobs. Shares dropped 9%.
February 17, 2026: The bombshell. Three C-suite executives — COO Marshall Beard, CFO Dan Chen, and CLO Tyler Meade — departed effective immediately. Cameron Winklevoss assumed COO duties. Interim leaders were named for finance and legal. Shares fell another 13%, closing at $6.59.
February 19, 2026: National shareholder rights firm Hagens Berman opened an investigation into whether Gemini violated federal securities laws, focusing on whether management knew about adverse international trends at the time of the IPO. Separately, Pomerantz Law Firm launched its own investor investigation.
The company's quarterly loss for the period ending September 2025 was $159.5 million. Its stock has lost 85% from its post-IPO high. The Winklevoss twins are now betting the company's future on prediction markets, claiming they "have the potential to be as big or bigger than traditional capital markets." Since launching Gemini Predictions in mid-December, 10,000 users have traded $24 million — a rounding error against the exchange volumes they are abandoning.
The fundamental problem with crypto exchange IPOs is that they sell equity in what are essentially cyclical trading businesses, while marketing them as technology platform companies deserving technology-sector multiples.
When Bitcoin fell from its October 2025 highs — declining over 35% to the mid-$60,000s by February 2026 — the damage to exchange economics was asymmetric. As VanEck's Matthew Sigel warned: "There is no CEO of Bitcoin, there will be no bailout."
The mechanics of the collapse are structural:
Basis Trade Unwinding. Hedge funds had been buying spot Bitcoin through ETFs while shorting futures to capture the spread. By early 2026, the basis trade paid less than 5%, triggering mass unwinding. Open interest in Bitcoin futures shrank from $61 billion to $49 billion. Total market leverage dropped more than 45% from its peak.
Retail Exodus. South Korean traders — once among the most active crypto retail participants globally — shifted en masse to traditional equity markets. U.S. retail engagement followed a similar pattern. Bloomberg reported that even modest price declines translate into "outsized revenue pain when traders step away altogether."
ETF Cannibalization. U.S. spot Bitcoin ETFs, which purchased 46,000 BTC in 2025, became net sellers in 2026. Nearly $4 billion left spot Bitcoin ETFs over a five-week period. The average Bitcoin ETF investor now sits on a 20% paper loss. ETFs promised to democratize Bitcoin exposure — instead, they created a low-fee competitor that siphons volume from exchanges.
Coinbase's Q4 2025 earnings crystallize the problem: revenue of $1.78 billion (down 21.6% year-over-year) and a net loss of $666.7 million. The stock was cut to "Strong Sell" by Zacks Research on February 20, 2026.
Not every public crypto company is following Gemini's trajectory. Coinbase, which has been public since its 2021 direct listing, is attempting a strategic transformation that may offer a blueprint for survival — or a cautionary tale about pivoting under pressure.
Goldman Sachs upgraded Coinbase to Buy in 2026, citing reduced reliance on trading volumes. The firm's subscription and services business now accounts for 40% of revenue, up from negligible levels two years ago. Coinbase's strategy is to evolve from a pure-play exchange into a "global market operator" — offering custody, staking, prime brokerage, and Base (its Layer 2 network) as diversified revenue streams.
The question is timing. With the stock at $164 and a market cap of $44 billion, Coinbase trades at 37 times earnings during a period when those earnings are declining. If the bear market deepens, the subscription revenue moat may not be wide enough to prevent further multiple compression.
Against this backdrop, Kraken's IPO ambitions stand out as either exceptionally brave or exceptionally poorly timed. The exchange confidentially filed its S-1 with the SEC on November 19, 2025, targeting a Q1 2026 listing. Its $800 million pre-IPO round was oversubscribed at a $20 billion valuation, with participation from Citadel Securities, Jane Street, and DRW Venture Capital.
Kraken's financials tell a more compelling story than Gemini's: 2025 revenue jumped 33% to over $2.2 billion, with adjusted EBITDA of $530.6 million. The company recently acquired token manager Magna on February 18, signaling continued M&A activity despite market conditions.
But the window may be closing. With Gemini's collapse and Bullish's slide fresh in investors' minds, the appetite for crypto exchange equity at growth-stage valuations is being severely tested. Steven McClurg, CEO of Canary Capital, has called 2026 "a bear leg to the four-year cycle." If Kraken prices below its private valuation — or delays — it will confirm that the 2025 IPO wave was a top signal.
The crypto exchange IPO reckoning reveals several structural truths that institutional investors should internalize:
1. Volume is vanity, revenue durability is sanity. Exchanges that depend on spot trading volume as their primary revenue driver will always be cyclical businesses. No amount of "platform" branding changes this. Circle's stablecoin infrastructure model (USDC yield, CPN payments network) offers more structural durability than pure trading revenue — yet even Circle is down 70% from its high.
2. Geographic diversification is expensive and fragile. Gemini's international expansion proved to be a liability, not an asset. The MiCA regulatory framework in Europe, the FCA's oversight in the U.K., and Australia's evolving rules created compliance costs that outpaced revenue in a contracting market. Retrenching to a single market is rational but destroys the growth narrative that justified IPO valuations.
3. The ETF paradox. Spot Bitcoin and Ethereum ETFs were celebrated as bullish for the entire crypto ecosystem. In practice, they have created regulated, low-cost alternatives to exchange-based trading. For retail investors who simply want Bitcoin exposure, a Fidelity ETF is now easier and cheaper than a Gemini account. Exchanges must find value-add beyond simple buy-sell execution.
4. Shareholder lawsuits are now a feature, not a bug. When crypto exchanges go public, they subject themselves to securities law scrutiny that private companies avoid. The Hagens Berman and Pomerantz investigations into Gemini represent a new cost of doing business for publicly traded crypto firms.
The 2025 crypto exchange IPO wave will likely be studied as a case of impeccable timing — from the issuers' perspective — and catastrophic timing from the investors' perspective. Companies that went public near the peak captured billions in primary capital. Their shareholders have absorbed the bear market losses.
This is not unique to crypto. Technology IPO windows have historically clustered near market tops, and the subsequent drawdowns are well-documented. What makes the crypto exchange cohort distinctive is the severity: losses of 50-85% within months, compressed into a cycle that moves faster than traditional markets.
For the industry, the reckoning carries a silver lining. Companies that survive — likely Coinbase and Kraken — will emerge with stronger balance sheets, diversified revenues, and the operational discipline that only a bear market can impose. The crypto exchange model is not dead, but its valuation framework is being permanently repriced.
The question for 2026 is whether Kraken enters public markets as the survivor that proves the model, or the last entrant through a closing window. Either way, the era of crypto exchanges going public on trading volume growth alone is over.