Gemini's credit card business is growing fast, but it's getting more expensive to run. Revenue from the card tripled in the second quarter, while transaction losses jumped 467% during the same period. The card operation also overtook the company's exchange trading as its biggest revenue source.
Card Revenue Overtakes Exchange Trading
For the first time, Gemini's credit card brought in more revenue than its exchange trading business in Q2. The company didn't break out dollar figures, but the shift marks a turning point for a firm best known as a crypto exchange. Card revenue tripled compared to the previous quarter, while exchange trading revenue didn't keep pace.
Losses Spike as Card Volume Grows
The expansion came with a steep price. Transaction losses — the money Gemini loses on unpaid balances, fraud, and other card-related costs — surged 467% in Q2. Credit losses, fraud costs, and rewards spending all increased during the quarter. That means the card's revenue growth isn't translating into profit at the same rate.
Rewards and Fraud Costs Bite
Gemini has been pushing its credit card with rewards tied to crypto. Higher rewards spending likely attracted more cardholders, but it also raises costs. At the same time, credit losses and fraud expenses climbed. The exact mix isn't disclosed, but the combined effect is a drag on the card's bottom line.
The next quarterly report will show whether Gemini can rein in those losses without slowing card growth. If losses keep climbing faster than revenue, the card business could become a liability despite its top-line success.
