Beginners guide to cryptocurrency exchange Gemini

Gemini boasts a reputation as one of the most reputable exchanges in the cryptocurrency space, focusing on regulatory compliance and customer security, which appeals to both retail and institutional investors

Introduction

The Gemini exchange was created by the Winklevoss Twins in October 2015. The pair have been keen cryptocurrency enthusiasts since its inception, making a significant $11 million Bitcoin investment in 2013 after receiving $65 million in damages from Facebook CEO Mark Zuckerberg in a landmark case.

Tyler and Cameron Winklevoss are up there as one of the largest holders of Bitcoin, reaching billionaire status during Bitcoin’s bull-run in 2017. The dynamic duo went on to single-handedly fund the creation of Gemini, which is one of cryptocurrency’s leading digital asset exchanges for both retail and institutional investors.

Gemini is a market leader in terms of adhering to regulation, becoming the first licenced Ethereum exchange based in the United States. They have also made steps to rid the crypto world of price manipulation and fraudulent activity, utilising NASDAQ’s SMARTs technology to monitor trades and price-action.

Signing up process

As Gemini are one of the most popular fiat gateways, allowing customers to deposit and withdraw US Dollar, KYC (Know Your Customer) is required upon sign-up. Firstly, users must set up 2 Factor Authentication by entering their phone number and location, this adds a level of security to accounts and reduces the risk of a malicious attack.

Users will then be asked to enter their bank details from the bank they wish to make deposits and withdrawals with. Once verified, users are required to upload a copy of their government issued ID, allowing Gemini to adhere to Anti Money-Laundering (AML) regulations.

After the application is processed users will be able to access Gemini’s deposit and withdrawal facility as well as their extensive trading tools.

Trading tools

Gemini present a slick trading interface that enables users to buy and sell Bitcoin, Ethereum and ZCash. Unlike Bitfinex and Bitmex, Gemini focus on spot trading and don’t offer margin or leveraged trading, appealing to retail investors who may not understand the risks associated with leverage.

US Dollar accounts are insured by the Federal Deposit Insurance Corporation (FDIC), with funds being stored in a chartered bank in New York. The level of security associated with Gemini’s exchange has seen it become popular among institutional investors. However, deposits via bank transfer are limited to $10,000 per day and $300,000 for institutional investors, while everyday retail investors are limited to $500 per day and $15,000 per month.

September 2018 saw the Winklevoss twins launch their very own stable-coin, Gemini Dollar (GUSD), which is pegged 1:1 with the US Dollar and will compete with Bitfinex’s USD-Tether. Built on the Ethereum blockchain as an ERC-20 token, GUSD can be purchased by customers who deposit dollars into their Gemini account, then withdrawn to any Ethereum wallet or a hardware wallet.

The ability to trade Bitcoin, Ethereum and ZCash with GUSD allows clients to hold an effective cash position, which can be useful during the volatile swings of the cryptocurrency market.

Market fees

Gemini offer a competitive fee structure, allowing users to deposit and withdraw USD free of charge, while charging a dynamic rate for trading on their platform. If a user’s 30-day trading volume is under $25,000, they will be charged 1% in maker, taker and auction fees, but if the user exceeds $25,000 or $50,000 they will pay 0.75% and 0.5% respectively.

Traders with a 30-day trading volume of over $15,000,000 earn the biggest discounts, being charged just 0.10% on taker fees and 0% on maker and auction fees.

Future plans

In addition to the Gemini Dollar that was announced in September, Gemini have plans to list Litecoin and Bitcoin Cash on the exchange, a move that will undoubtedly improve liquidity and open interest in the market.

The Winklevoss twins have also recently announced that they have secured insurance on their customer’s digital assets, arranged by Aon Plc. This is a positive step by the twins, ensuring customers funds are safe in light of numerous exchange hacks that have blighted the cryptocurrency space over the last few years.

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