Gemini’s crypto custody exceeds $30 billion, while analysts expect Coinbase shares will sink to $100.

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Gemini’s crypto reserves in custody have tripled this year, owing to increased demand from banks and fund managers, according to the exchange.

As competitiveness among top U.S. exchanges heats up, the Winklevoss twins’ Gemini exchange now has $30 billion in cryptocurrencies under control.

In a May 11 announcement, the exchange attributed much of the growth this year to strong demand from institutional clients:

“Tracking with the impressive growth of the crypto market this year and increased participation from institutional investors, we have more than tripled our crypto under custody since the beginning of 2021.”

BlockFi, Blockchange, CoinList, CI Global Asset Management, DAiM, BTG Pactual, Caruso, Eaglebrook Advisors, and WealthSimple are among the major asset managers with whom Gemini collaborates.

Cameron and Tyler Winklevoss formed the New York-based business in 2014. In the run-up to rival exchange Coinbase’s direct listing on the Nasdaq on April 14, the pair told Bloomberg they were “considering” bringing Gemini public as well.

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If Gemini or another major exchange goes public, it will have a huge effect on Coinbase’s share price, which has dropped from $328.28 on the first day of trade to $288.46 today.

Is Coinbase over-valued?

Veteran Wall Street analyst and New Constructs CEO, David Trainer, said in a note to clients on Tuesday that he expects Coinbase’s share price to decline to $100 or even lower due to increasing competition. Trainer suggested that Coinbase is currently overvalued, noting its current valuation implies it will exceed the combined annual revenue of Intercontinental Exchange and Nasdaq.

“Investors should expect the stock to continue to underperform, as shares could fall to $100 or less as it becomes clear the company is unlikely to meet the future profit expectations baked into the stock price.”

On Thursday, Coinbase is forecast to post first-quarter earnings of $3.07 per share on sales of $1.82 billion. Trainer said that even though it outperformed forecasts, it would only draw more rivals and reduce potential sales.

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“Coinbase will likely not be able to sustain blowout earnings going forwards as competition enters the market,” he predicted.

Trainer cautioned in April that the proposed $100 billion price for Coinbase was far too high due to strong competition from Gemini, Bitstamp, Kraken, and Binance.

According to data released in March, Coinbase Custody will have more than $90 billion in assets under custody by the end of 2020.

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