A historic stock market debut is imminent, with SpaceX's $75 billion IPO expected to draw significant interest and potentially divert liquidity away from crypto. The company has filed a confidential S-1 with the SEC, targeting a $1.75 trillion valuation, which would make it the largest stock market debut in history. SpaceX is not alone, as OpenAI and Anthropic are also planning to go public, with the three companies expected to raise over $240 billion from June to the end of the year. This capital pull is larger than every venture-backed US IPO since 2000 combined, and crypto is at risk of being affected as it sits in the same liquidity pool.
The rotation of capital into these IPOs could lead to a compression of liquidity in other assets, including crypto. Bitcoin and other major cryptocurrencies have traded with tightening correlation to the Nasdaq and S&P 500, and when speculative capital leaves equities for an IPO allocation, some of that capital may not be available to bid up crypto. The historical parallel with Coinbase's IPO in 2021 is a point of concern, as it marked the peak of the last bitcoin cycle.
The 30% retail allocation in SpaceX's IPO is also notable, as it could divert money away from crypto. Furthermore, SpaceX holds a significant amount of bitcoin, making its IPO the first public-market debut of a company with a material bitcoin position disclosed under new accounting rules. The testable signal going forward is whether crypto can hold up through the roadshow window in May and June or begins to drift lower as allocators free up room for the SpaceX subscription.