Dec 10 (Reuters) – Gemini, the crypto platform founded by billionaire twins Tyler and Cameron Winklevoss, said on Wednesday it had received a license from the Commodity Futures Trading Commission to offer prediction markets to U.S. customers.
Shares of the New York-based company jumped 10.8% in extended trading. The stock has more than halved from its IPO price as of last close.
Gemini joins a growing number of companies venturing into the nascent and burgeoning corner of finance that has exploded in popularity in recent years.
Digital sports firm Fanatics last week announced its entry into the prediction markets, while Robinhood and Susquehanna teamed up in November to take over exchange LedgerX in their push to establish a stronghold in the space.
Prediction markets, which allow investors to bet on everything from major sports tournaments to monetary policy, have gained major traction since a U.S. federal court last year dismissed a CFTC prohibition on election betting.
“Prediction markets have the potential to be as big or bigger than traditional capital markets,” said Gemini President Cameron Winklevoss.
While critics liken prediction markets to gambling, proponents see the asset class as an accurate gauge of market expectations compared to traditional methods.
The approval is also a major boost for Gemini, which has had a rough start as a public company since its New York debut in September.
“Today’s approval marks the culmination of a 5-year licensing process and the beginning of a new chapter for Gemini,” CEO Tyler said, adding the firm had first applied for the license in March 2020.
Gemini customers in the U.S. will be able to participate in prediction markets on the web interface shortly, while trading events contracts through the mobile app will be made available later.
Gemini said it will also explore expanding its derivatives offering for U.S. customers to include crypto futures, options and perpetual contracts down the line.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Maju Samuel and Alan Barona)
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