Cryptocurrency exchange Gemini(GEMI.US) has allocated up to 30% of its IPO quota to retail investors, betting on the enthusiasm of retail investors on the eve of its listing.

Gemini Space Station Inc. (GEMI.US), a cryptocurrency exchange, is set to debut on the US stock market this Friday. Before its initial public offering, retail traders have a rare opportunity to take a big bet on this billionaire-backed company. According to a latest document released on Tuesday, the company, supported by Cameron Winklevoss and Tyler Winklevoss, plans to allocate up to 30% of its stock in the IPO to small investors through online brokerage platforms such as Robinhood Markets (HOOD.US), Futu Holdings Ltd. Sponsored ADR Class A's Moomoo, and Webull Corp. Interestingly, Robinhood was a pioneer in its own IPO in 2021, choosing to allocate over one-third of its stock to retail investors, although the result was mixed for investors. For many retail investors who support Gemini and a host of other US IPOs, the challenge lies in agreeing to anti-flipping clauses, which discourage selling stocks within the first month. If the market enthusiasm fades before investors can sell their stocks at no cost, they could miss out on substantial profits. In theory, Gemini, with ties to the Trump administration that supported cryptocurrencies and a user base of digital asset enthusiasts, is a natural choice for retail investors seeking the next quick profit opportunity. This year, the US IPO market has seen impressive performances from companies like design software company Figma Inc. (FIG.US) and stablecoin issuer Circle Internet Group Inc. (CRCL.US). However, Gemini's significant losses and relatively small share in cryptocurrency trading may give investors pause. Craig Stephens of Access IPOs stated, "Gemini is a tricky case, as the company provides Information Services Group, Inc. for ordinary investors looking to buy shares of newly listed companies. "There is enthusiasm for cryptocurrency, but the company is a bit like a second-tier exchange, and revenue performance is average." A representative of Gemini declined to comment. When marketing started last week, Gemini originally planned to reserve up to 10% of its stock for retail investors. However, on Tuesday, it opted for a larger allocation while also introducing Nasdaq-listed companies as investors through a private placement, with an investment of $50 million. Catering to retail investors Gemini's catering to retail investors goes a step further than its competitor Bullish. According to Bullish CEO Tom Farley, Bullish allocated 20% of its IPO shares last month to individuals, including self-directed investors and wealthy clients of large banks. Bullish's strategy of leveraging retail enthusiasm for cryptocurrency companies has been effective so far. On August 13, its stock soared 84% at the opening to $68, although it later fell to a closing price of $52.62 on Wednesday. Robinhood made its debut in the IPO frenzy of 2021, allocating up to 35% of its $2.1 billion listed stock to customers using its IPO Access feature. While its stock price surged above $70 in the first week, it fell to under $7 by mid-2022. A rebound in 2025 saw Robinhood's stock trading above $100, providing long-term investors with a corresponding return. Hot or cold reception Companies like Gemini have ample reason to attract retail investors, especially those passionate about cryptocurrency and who are already familiar with the company as customers. "Do you want a shareholder base full of cryptocurrency enthusiasts, or a group of hedge fund mercenaries who will short your stock at the first sign of bad news?" said James Angel, a finance professor at Georgetown University. Angel also noted that retail investors are typically more willing to pay a higher price than institutional investors, especially for cryptocurrency companies. They may buy stocks that institutional investors, who are more well-informed, have already given up on. "The question is whether this is a hot IPO or banks are having trouble selling the stock, so they are dumping it on retail buyers," Angel said. "Is there adverse selection here? That's always a concern for small investors." While greater retail involvement is a welcome development for long-time advocates, Gemini may be taking advantage of the price insensitivity of retail demand. On the same day it decided to allocate more stock to retail investors, Gemini significantly raised the marketing price range for its IPO, from $17 to $19 per share to $24 to $26 per share. However, Stephens of Access IPOs noted that obtaining stock at the IPO price rather than having to buy at potentially higher prices after trading begins provides a certain level of protection for small investors.