Gemini Bitcoin Exchange has been online for a week. How is it performing?

Since the famous twin brothers卡梅伦•文克莱沃斯and泰勒•文克莱沃斯announced plans for the Gemini Bitcoin exchange at the beginning of this year, their every move has successfully attracted media attention, such as online media The Financial Times, TechCrunch and Wired. The brothers also promoted the Gemini Bitcoin exchange on TV screens through Fox News.

Will the Gemini Bitcoin Exchange, which has been so successfully marketed, perform equally well after its launch?

Data shows that the Gemini Bitcoin exchange has seen a continuous increase in trading volume since its launch more than a week ago. On October 14, the total Bitcoin trading volume reached 384 BTC (about $100,000), twice the daily trading volume at the beginning of its launch. However, compared with other established exchanges, it is much inferior.

According to data on Coinmarketcap, Bitstamp’s 24-hour Bitcoin trading volume was 20,209 BTC (about $5.3 million), 50 times the total daily trading volume of Gemini Exchange, while Bitfinex and BTC-e’s Bitcoin trading volumes in the past 24 hours were 12,742 BTC (about $3.3 million) and 8,340 BTC (about $2.1 million), respectively.

How do industry insiders view and evaluate the performance of Gemini transactions?

亚瑟•海因斯, CEO of BitMEX, said:

“Gemini has had short-term success in attracting retailers to their platform. Gemini has the celebrity power of the twins.”

Collect Maker Fees

Many people think that Gemini’s pricing model is a bit strange. Gemini plans to charge a transaction fee of 0.25% to both parties of the transaction.

The founder of a digital currency trading company who wishes to remain anonymous commented that Gemini’s charging method is strange because almost every Bitcoin exchange is trying to make its pricing more attractive to liquidity providers in order to gain a larger market share.

Many trading platforms such as Coinbase, Coinfloor, Kraken and itBit adopt the Maker & Taker model. In this model, Maker refers to the person who provides depth, and conversely, Taker is the person who takes the depth. The platform will charge the Taker a normal transaction fee, and part of it will be returned to the Maker.

Tim Enneking manager of Bitcoin hedge fund Crypto Currency Fund, believes that Gemini's pricing goes against the industry's trend of lower Bitcoin transaction fees. According to Gemini's current pricing model, active traders will "not be able to survive", and these active traders can add valuable liquidity, but they rely on small price fluctuations to make profits.

“They have to attract smaller but more active traders, but I’m not sure they can do that successfully.”

Tim Enneking believes that although the security of the platform is important, it is not enough to attract traders because traders are already accustomed to trading with certain risks. However, he said that this is just his personal opinion.

Enhanced liquidity

Additionally, some market observers believe that the liquidity of the Gemini trading platform is low.

乔治•萨曼, co-founder of bitcoin company BTC.sx (now Magnr), believes that Gemini's late launch is one of the reasons for its low trading volume on the platform. Its competitors Coinbase and itBit were launched during a relatively active period.

However, Saman also admitted that Gemini's lack of liquidity is also one of the problems faced by the entire industry, for many reasons, such as the current weak demand for Bitcoin as an asset and people's "distrust" of trading platforms. In addition, he also believes that Gemini's "by-the-book" approach may drive away some enthusiastic traders, including those with libertarian and anti-government tendencies.

Expanding influence

However, most commentators are still optimistic about Gemini and believe that the launch of the exchange will have a positive impact on the Bitcoin ecosystem. However, it will take time to gain the support of the Bitcoin trading community and build traders' trust in the platform.

Just like itBit, which was launched in May this year, itBit's initial trading volume was also very low, but through effective market means, it gradually gained users, and because it was the first Bitcoin company to be recognized by regulators, it also gained certain early advantages.

Hines said:

“What Gemini needs to do is differentiate itself from itBit and Coinbase.”

“All three US bitcoin trading platforms are committed to compliance. The services they provide are also very similar.”

Enneking believes that if Gemini wants to gain a foothold in the highly competitive market, it must change its strategy to win over active traders.

Original article: http://www.coindesk.com/winklevoss-bitcoin-exchange-gemini-win-traders/
By Pete Rizzo
Translator: printemps
Editor: printemps
Source (translation): Babbitt Information