A historic stock market debut is on the horizon, with SpaceX's initial public offering (IPO) anticipated to take place in June, drawing interest from the same liquidity pool as crypto. The company has filed a confidential S-1 with the SEC, aiming for a $75 billion capital raise at a valuation of $1.75 trillion. If successful, this would be the largest stock market debut in history, surpassing Saudi Aramco's $29 billion record in 2019. Furthermore, OpenAI and Anthropic are also planning to go public, with the combined capital raise of the three companies potentially exceeding $240 billion from June to year-end.
This massive influx of capital could lead to a compression of liquidity in the crypto market, as investors allocate their funds to these new listings. The correlation between crypto and tech stocks, particularly those in the AI sector, has been tightening over the past two cycles. As a result, when speculative capital leaves equities for an IPO allocation, some of this capital may also leave the crypto market, potentially causing a decline in bitcoin's value. The historical parallel with Coinbase's IPO in 2021, which marked the peak of the last bitcoin cycle, serves as a point of concern.
The lesson learned from this experience is that institutional milestones often mark the beginning of the end of a cycle, rather than its starting point. With SpaceX's IPO on the horizon, the 30% retail allocation and the company's material bitcoin position make it a significant event for the crypto market.
The testable signal going forward will be whether crypto can hold up through the roadshow window in May and June or if it will begin to drift lower as allocators free up room for the SpaceX subscription.