In approximately six weeks, one of the largest initial public offerings in history is set to take place, and it may have a significant impact on the cryptocurrency market. SpaceX has filed a confidential S-1 with the SEC, aiming to raise $75 billion at a valuation of $1.75 trillion. If successful, this would not only be the largest stock-market debut but also more than 2.5 times larger than the previous record set by Saudi Aramco in 2019.
Furthermore, OpenAI and Anthropic are also planning to go public, which could result in a combined capital raise of over $240 billion from June to year-end. This amount exceeds the total venture-backed US IPOs since 2000, according to PitchBook estimates. The massive influx of capital into these IPOs may lead to a reduction in liquidity for other assets, including cryptocurrencies.
As crypto assets are part of the same risk-on liquidity pool as tech and AI equities, a significant amount of capital may be diverted from the crypto market to invest in these IPOs. Historical data suggests that when speculative capital leaves equities for an IPO allocation, it can lead to a decrease in the value of higher-beta assets, including crypto.
For instance, after Coinbase's IPO in April 2021, bitcoin experienced a 50% drawdown within six weeks. The upcoming SpaceX IPO has two key features that connect directly to crypto flows: a 30% retail allocation, which could divert funds away from crypto investments, and the company's significant bitcoin holdings, making it the first public-market debut of a company with a material bitcoin position disclosed under the new fair-value accounting rules. The performance of crypto during the roadshow window in May and June will be a testable signal, indicating whether crypto has decoupled from broader risk-on flows or will be affected by the massive capital pull of the IPOs.