Gemini's stock price surges 13% on the US exchange... What's so great about prediction markets? [Doyeri's DeFi Radar]

Shares of Gemini, a Nasdaq-listed cryptocurrency exchange, surged over 13% after securing a new license to offer prediction market services in the United States. This demonstrates the growing interest in prediction markets in general.





Gemini announced on the 10th (local time) that its affiliate, Gemini Titan, had obtained a Designated Contract Market (DCM) license from the U.S. Commodity Futures Trading Commission (CFTC). This comes five years after Gemini first applied for the license on March 10, 2020. This grants Gemini the ability to offer prediction market services to U.S. residents.

Titan plans to introduce event-based contracts in a "yes/no" format. For example, this structure allows investors to invest by answering "yes" or "no" to questions like, "Will 1 Bitcoin (BTC) exceed $200,000 by the end of this year?"

On this news, Gemini's stock price surged 13.7% to $12.92 in after-hours trading on the 10th (local time). It had fallen 0.7% during the regular session.



Prediction markets are experiencing rapid growth this year. According to Cointelegraph, a cryptocurrency news outlet, major platforms like Polymarket and Kalsi recorded record monthly trading volumes in November. The strengths of on-chain prediction markets lie in their high transparency and low tampering potential, as betting, trading, and settlement processes are recorded on the blockchain. The ease of betting using stablecoins is also cited as a growth factor. Fueled by the prediction market craze, Kalsi closed a $1 billion (approximately KRW 1.474 trillion) investment round earlier this month, valuing the company at $11 billion (approximately KRW 16.214 trillion).

Global cryptocurrency platforms are also entering the prediction market space. Trust Wallet, a cryptocurrency wallet service, launched its prediction market service on the 2nd of this month. Coinbase has partnered with Kalsi to store USDC, used for collateral and settlement in event-based contracts, in Coinbase Custody. The two companies plan to enhance reliability by combining regulated prediction markets with a robust stablecoin infrastructure.

Cameron Winklevoss, President of Gemini, said, "Prediction markets have the potential to become as large as, or even larger than, traditional capital markets. Acting CFTC Chairwoman Caroline Palm truly understands this vision and its importance." He added, "Unlike her predecessor, Acting Chairwoman Palm has transformed the CFTC into a pro-business, pro-innovation agency, laying the foundation for the United States to lead this new market."

However, there are criticisms of prediction markets. Some US state regulators view them as a gambling-like product and have taken action against CFTC-registered platforms, accusing them of offering unlicensed sports betting.

Reporter Do Ye-ri