If you only want to buy and sell Bitcoin and Ethereum, and you’re willing to use only U.S. dollars, you might want to have a look at the Gemini exchange. Despite its limitations, Gemini is rapidly becoming known as a good exchange for serious traders, thanks to a clean, robust, and easy to use interface, combined with enterprise level security.
History of Gemini
Gemini is the brainchild of the Winklevoss twins – Cameron and Tyler. These two became famous, and rich, after winning a $65 million 2008 lawsuit against Facebook, claiming Mark Zuckerberg stole their idea in the creation of Facebook.
The two immediately put their windfall to work, and one of the things they did was invest in Bitcoin in a big way. By 2013 they had amassed $11 million worth of Bitcoin, with each Bitcoin valued at just $120 at that time. Since then they are well known as one of the largest HODLers of Bitcoin and have also been called the first Bitcoin billionaires when the price of Bitcoin first crossed above $11,000 in December 2017.
Not content with just sitting on their wealth, the twins turned their focus to building a Bitcoin exchange, with the goal of making it secure, regulated and compliant with U.S. laws. Their vision became Gemini, which was launched two years ago and has rapidly become a respected player among Bitcoin exchanges, especially for financial institutions.
In this review, we will be taking a look at the Gemini exchange, its features, trading platform, fees and potential future growth.
About Gemini Exchange
Gemini is a step apart from many other cryptocurrency exchanges. While others are focused on all the latest coins and decentralizing, Gemini has made a name for itself with its strong focus and embrace of compliance with legal requirements and regulations.
Gemini was the very first exchange in the U.S. to be officially licensed by the New York State Department of Financial Services (NYSDFS) for trading in both Bitcoin and Ethereum. Early on, the founders of Gemini made the decision to align the exchange closely with lawmakers and regulators, and this alignment has given the exchange a definite air of legitimacy. It also gives it a clear advantage over other cryptocurrency exchanges with financial institutions and professional traders.
The Gemini exchange is based in New York and holds the status as being a New York State limited liability Trust, with oversight coming from the NYSDFS. This gives Gemini the ability to provide its services to both institutions and to the average man of the street like you and I. Keeping with the theme of compliance and regulation, the company website is reminiscent of leading financial institutional sites, meaning it really caters to Wall Street and the bankers.
As a fully compliant and fully registered enterprise, Gemini is a fiduciary and subject to the capital reserve requirements, cybersecurity requirements, and banking compliance standards set forth by the New York State Department of Financial Services (NYSDFS) and the New York Banking Law. This means all client funds are segregated, and are held at FDIC insured banks, providing the utmost in client safety. This has also allowed Gemini to woo institutional investors who require this level of regulation and capital safety.
Because of its licensure and compliance with strict financial services and banking laws, Gemini is one of the sector’s most well respected exchanges. It has set itself up as a bridge between the traditional financial markets and the cryptocurrency ecosystem. That gives it quite an advantage as cryptocurrencies gain more respectability and begin to go mainstream. The exchange also brings a high level of professionalism to the market and provides a high class service that is lauded by its customers.
Gemini Signup & Login
Gemini’s registration process begins the same as most exchanges, with an online form that requires you to input your full name, email address and a password of your choosing. Note that passwords must contain at least 8 characters, and must contain at least one uppercase letter, number, or special character. You must also avoid the use of common words.
Because of its licensing, Gemini is required to adhere to Bank Secrecy Act (BSA), Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. This adds additional steps to the process of registering your account with Gemini. Once you’ve verified your email address you will also need to take the following steps before depositing, withdrawing, or trading:
- Enter your physical address and phone number. This is for KYC compliance and will also allow you to set up 2-Factor Authentication (2FA), which is highly recommended as it adds an additional layer of security to your account..
- Add your bank account information. This is the bank you plan on using for deposits and withdrawals and is necessary as Gemini currently only accepts bank ACH and wire transfers as deposit methods. It is possible to do automatic verification of your bank account by entering your bank login credentials. These credentials are passed encrypted and securely, and are not saved by Gemini. It is simply the quickest and easiest method for adding and verifying your bank account.
- Next you will need to upload a copy of your ID (drivers license, passport, or other government issued ID). This allows Gemini to comply with the Bank Secrecy Act (BSA) and Anti Money Laundering (AML) regulations. You ID will be checked to ensure it is not on the Office of Foreign Assets Control (OFAC) or other government watchlists. This also allows its users to deposit, withdrawal, and trade in US Dollars. The verification time of your ID will depend on the number of applications being processed and can take anywhere from one to several days.
- Once your personal information has been processed and verified your account registration process is complete and you can make a deposit to begin trading. It does seem like a lot, but many U.S. based exchanges require similar steps to remain in compliance with U.S. laws and regulations.
Making a Deposit at Gemini
Because you’ve already set-up your bank account, making a deposit is easy. You simply navigate to “Transfer Funds” in the menu, then choose Deposit into Exchange, followed by Bank Transfer. Individuals are limited to $500 per day for bank transfers, and $15,000 per month. Because you’re making an ACH transfer your funds will be immediately available for trading. If you want you can also make a transfer via wire deposit. These funds are also made immediately available and there are no deposit limits on wire transfers.
Buy Bitcoin and Ethereum
After you’ve made your deposit your ready to make your first Bitcoin or Eethereum purchase. Simply enter the price and amount to purchase and press the Buy button. There is also a marketplace you can access to make purchases directly from other Gemini users. More about that below.
The Gemini Marketplace
In addition to normal trading, Gemini operates an internal marketplace that runs 24/7. This marketplace allows clients to submit orders with a number of trading conditions. These trade conditions include:
- Market Orders- These are filled immediately against existing orders and are filled at the best available price.
- Limit Orders – These order will sit on the books until they can be filled at the specified price or better. There is no expiration for limit orders, and the only way they are removed is if the client cancels them.
- Immediate or Cancel (IOC) Limit Orders – These are limit orders that are filled immediately at a better price than the one specified, or they get cancelled and do not remain on the order books. Note that IOC limit orders can be partially filled.
- Maker or Cancel (MOC) Limit Orders – These limit order will sit on the order books until filled, but can also be partially filled, at which point the remaining portion of the order is cancelled.
Because Gemini is required by their license to act as a full reserve exchange all of the orders placed in the market place are fully funded by the exchange. However, there is no margin trading available on the Gemini platform, and in no case can outstanding orders exceed a client’s account balance. All open order, including limit orders, will reduce your available balance until they are either filled or cancelled.
Gemini Trading and Withdrawal Fees
Fees at Gemini are not all that low, but neither are they all that high. In fact, they pretty much hit the same level as most cryptocurrency exchanges. Fees for trades range from 0.00% up to 0.25%, depending on your 30 day trading volume. So, the more you trade, the lower your fees.
Obviously those just getting started are likely to be on the higher end of the fee spectrum and can expect to pay 0.25%, but that’s still not bad, and certainly not enough to say steer clear of Gemini. In fact, the fee is well worth it considering it could be far larger at some exchanges, and you get a very secure trading experience at Gemini. The trading interface is also very straight-forward, making it easy for beginning traders.
You’ll also find that Gemini uses a dynamic maker/taker rebate schedule, which means clients can receive rebates on any liquidity providing trades. The amount of the rebate is based on the 30 day average on gross trading volumes and the data is recalculated every 24 hours. If you need more information on the rebate schedule you can find it here.
Regarding other fees, Gemini makes all deposits free of fees, whether they come in the form of Bitcoin, Ethereum or U.S. dollars. They also make all withdrawals via ACH or wire transfer free. Withdrawals in Bitcoin and Ethereum are also free, for the first ten every month. That’s very generous, and I don’t think many will be making more than 10 withdrawals a month. If you do the standard mining fees for the given network will apply, which means currently 0.002 BTC per transaction or 0.001 ETH per transaction. You can see the withdrawal fee schedule here.
The Key Features of Gemini
- Functionality – Much thought was put into the design of the Gemini platform and it is very user-friendly. Not only that, but it works swiftly and smoothly, with key information such as prices, order book, balances updated in real-time. As you know, this is critically important if you’re trading the rapidly changing cryptocurrency markets.
- Security – It would be difficult to find a platform that takes security more seriously than Gemini. Because it needs to remain compliant with all consumer protection and digital asset regulations there is a high degree of security in the platform, and in regard to client information and deposits. Digital assets are all put into cold storage, and all U.S. dollar balances are help in segregated accounts at FDIC insured New York state banks. Online assets are hosted with Amazon Web Services, which provides an additional layer of security itself.
- Customer Support – Customer support at Gemini is similar to that provided by other major cryptocurrency exchanges. All the basic questions have answers posted in an in-depth Help Center using the Zen Desk technology. For questions that need a specific answer support is provided via email, and answers are typically provided within a few hours.
- International Availability – The exchange is currently available to approximately 45 U.S. states (not currently available in Wisconsin, Hawaii, Alaska, Arizona and Oregon), Canada, Hong Kong, Puerto Rico, Singapore, South Korea and the United Kingdom. Gemini continues to work to expand its availability.
Is Gemini Safe?
Gemini has a reputation in the cryptocurrency space as being one of the most secure exchanges, and continues to add additional security layers to ensure that they remain compliant with security measures required by the banking and financial services sectors. On the user side the use of 2-factor authentication helps provide additional account level security. In its two years of operation Gemini hasn’t seen a successful hack on its data or assets.
Regarding assets, all client assets are segregated from operational assets, which means client funds would be secure even if Gemini failed and closed up shop or went into bankruptcy. All U.S. dollar funds are kept in FDIC insured U.S. banks, and all cryptocurrency assets are secure in cold storage wallets to keep them inaccessible to hackers. Digital assets are secured through the use of Amazon Web Services, which provides a crucial extra level of security as Amazon Web storage utilizes security features such as multi-factor authentication, tiered-access controls, as well as dedicated hardware security modules.
The unwavering commitment to high levels of security have made Gemini a favorite of institutions and high net worth investors. It also appeals to the average individual investor who values safety and security in their trading exchange. These high standards of security allow Gemini clients to maintain confidence in the security of their capital and personal information.
Downsides to Gemini
- Even though it was started in 2015, Gemini remains one of the newer exchanges. While it continues to grow at a steady rate, it hasn’t been in existence long enough to know if it is really as safe and secure as it claims. That said, the Gemini team is focused on security, and with the additional focus on institutional clients you can be pretty sure that security will remain a high priority. On the other hand, the focus on institutional accounts could also make Gemini a target for hackers.
- Gemini has a very limited number of cryptocurrencies available. In fact, just two – Bitcoin and Ethereum. This makes it more suited as an exchange to purchase Bitcoin and Ethereum to transfer to other exchanges that have a greater range of coins available. It’s also a downside that Gemini only has support for U.S. dollars as it excludes traders from around the globe.
- Customer service exclusively through email may be ok for some services, but I don’t think it is appropriate or suitable for a platform that provides financial services. Issues arise that could involve tens, if not hundreds of thousands of dollars, and waiting hours for a return email is simply not acceptable. Of course this is true for the vast majority of cryptocurrency exchanges, but given Gemini’s focus on institutional and high net worth individuals I would think that they could step up their game and offer online chat support at the very least. Phone support would be far better though, in my opinion.
If you’re in search of a solid exchange and don’t need access to more than Bitcoin and Ethereum, then Gemini is a good choice. Just like Coinbase it acts as an entry point for many who are beginning their journey into the world of cryptocurrencies. Because you can make deposits directly to and from your bank account it is very convenient, but if you want to buy cryptocurrencies other than Bitcoin and Ethereum you’ll also need to find another exchange and move your Bitcoin and/or Ethereum from Gemini to that exchange.
The security provided by Gemini is also a good selling point, especially for those who are used to the traditional financial institutions. With FDIC protection for U.S. dollar deposits, and cold storage for your cryptocurrencies you can sleep easy at night if you have funds sitting at Gemini.
Because it is new and has a limited number of coins (and in fact fiat) on offer Gemini has plenty of room to grow. I’m not certain it will grow all that fast however. It seems as if the exchange has its sights set on a huge influx of institutional money once cryptocurrencies become increasingly accepted by traditional financial institutions. That could be its strength as it has certainly positioned itself well in that capacity.