In approximately six weeks, one of the largest initial public offerings in history is expected to take place, and it may have a significant impact on the crypto market. SpaceX has filed a confidential S-1 with the SEC, seeking to raise $75 billion at a valuation of $1.75 trillion.
This offering is anticipated to be more than 2.5 times larger than the previous record set by Saudi Aramco in 2019. If successful, it will be the largest stock-market debut in history.
Other notable companies, such as OpenAI and Anthropic, are also planning to go public, with estimated valuations of nearly $1 trillion and over $60 billion, respectively. The combined total of these IPOs is expected to exceed $240 billion, surpassing the total amount raised by all venture-backed US IPOs since 2000. This massive influx of capital may divert investment away from crypto, potentially disrupting the market. According to Alex Good, founder of Post Fiat, the IPO could lead to a bearish equities market, which may have a ripple effect on crypto.
Crypto assets, including bitcoin and ether, have been trading with increasing correlation to the Nasdaq and S&P 500, and a shift in investment towards these IPOs could lead to a decrease in crypto prices. Historical data suggests that institutional milestones, such as IPOs, can mark the peak of a market cycle rather than the beginning. The Coinbase IPO in 2021, for example, coincided with the peak of the bitcoin cycle, followed by a 50% drawdown. The SpaceX IPO has two key features that may impact crypto flows: a 30% retail allocation, which could divert investment away from crypto, and the company's significant bitcoin holdings, worth approximately $600 million.
The outcome of this event will be closely watched, as it may provide insight into the relationship between crypto and broader risk-on flows.