Citigroup analyst Peter Christiansen downgraded Gemini Space Station (Nasdaq: GEMI) to Sell from Neutral on Wednesday and cut the stock's price target by more than 57%, from $13 to $5.50, citing delayed profitability and stalled U.S. crypto legislation.
GEMI fell more than 16% to approximately $5.95 during the session - putting it nearly 79% below its September 2025 IPO price of $28 per share.
The downgrade arrived the day before Gemini's scheduled full-year 2025 earnings release.
Christiansen now projects an adjusted EBITDA loss of $263 million for 2025 and has pushed his EBITDA breakeven estimate to 2029 - a year later than Citi's prior forecast.
What Drove the Downgrade
Citi cited four primary concerns: declining user activity, significant restructuring, cyclical revenue headwinds, and the slowing pace of U.S. crypto legislation. Monthly app downloads fell to 41,000 in February, down from more than 100,000 in each of the preceding nine months.
The exchange IPO'd near Bitcoin's (BTC) October 2025 peak; since then, Bitcoin has retreated approximately 40% from its all-time high, depressing industry trading volumes and exchange revenue.
In February, Gemini announced a 25% headcount reduction and the wind-down of operations across the U.K., European Union, and Australia - giving affected users until April 6 to withdraw funds. The company's COO, CFO, and Chief Legal Officer have since departed.
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Citi Also Cut Bitcoin and Ethereum Targets
The GEMI downgrade followed Citi's earlier revision of its 12-month cryptocurrency price targets.
The bank lowered its Bitcoin forecast 22% from $143,000 to $112,000 and its Ethereum (ETH) target 26% from $4,304 to $3,175. Citi explicitly cited "stalled" momentum on the CLARITY Act - the pending U.S. crypto market structure legislation - as a key factor.
The bill requires at least seven Senate Democratic votes to advance, and midterm elections in November could further complicate that calculus.
Bitcoin was trading near $71,250 and Ethereum near $2,175 at time of writing, both down Wednesday amid inflation data and geopolitical uncertainty.
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