Digital currency trading platforms are capitalizing on investor excitement around SpaceX by offering speculative betting opportunities on the company’s stock price ahead of its public offering.
Trading volumes reaching billions of dollars have poured into financial products called “pre-IPO perpetual futures,” which operate independently from actual company shares but base their pricing on SpaceX’s most recent private valuation figures.
These trading instruments, commonly called “perps,” already exist for digital currency speculation. They continue rolling over without expiration dates and permit traders to use borrowed money for larger position sizes.
The growing appeal of these new pre-IPO products — available on platforms such as Binance, Coinbase and Hyperliquid — has heightened tensions between cryptocurrency markets and traditional Wall Street as major public offerings approach, potentially including artificial intelligence companies Anthropic and OpenAI.
When news emerged that federal regulators would authorize these betting contracts for digital currencies, shares of Intercontinental Exchange, which owns the New York Stock Exchange, dropped earlier this week as market participants considered the long-term competitive challenge to established trading venues.
The stock decline extended into the following trading day, partly driven by investor concerns that these contracts might expand into traditional equity markets.
Financial markets worldwide are preparing for the public offering of the company owned by the world’s wealthiest individual, which seeks to raise a record-breaking $75 billion to support growth plans tied to ambitious long-term goals including Mars settlement and orbital data facilities.
Data from analytics firm Talos shows approximately $3.2 billion in trading activity and $390 million in outstanding positions for SpaceX pre-IPO contracts from May 17 through Wednesday, covering eight different trading platforms.
Binance reported $2.1 billion in trading volume for its SpaceX pre-IPO products over 18 days, though the company refused to provide regional breakdowns.
“This is obviously aimed at a crypto-native, crypto-friendly audience that are looking to obtain high-leverage bets on specific market movements,” said Philippe Noeltner, a lawyer at A&O Shearman, calling the volumes “mind-boggling.”
While cryptocurrency perpetual contracts frequently provide extreme leverage ratios up to 100-to-1, the newly introduced pre-IPO versions typically limit leverage between 3x and 5x, according to market analysts.
Digital currency exchanges generally profit from these offerings through market-making activities and transaction fees charged to purchasers.
Supporters argue that pre-IPO perpetual contracts — which are typically unavailable to American investors — serve as price discovery tools and broaden access to U.S. equity market opportunities.
However, detractors warn these instruments carry substantial risks due to limited liquidity, extreme price swings, and unlike tokenized stocks, lack connection to any underlying assets. When companies eventually go public, the contract prices adjust to match share prices, though specific mechanisms differ across platforms.
SpaceX pre-IPO contract prices have dropped from over $200 to approximately $160 within a month, based on Kaiko pricing information. SpaceX shares are expected to be priced at $135 each.
“This pre-IPO perpetual isn’t really anchored towards anything other than speculation,” said Kaiko analyst Laurens Fraussen.
“The pre-IPO thing is, alongside prediction markets, a good example of where the world is heading… it’s like the hyper-gambler-isation of everything.”
The World Federation of Exchanges, representing global stock markets, expressed concern that purchasers might believe they’re acquiring assets with the same protections as listed securities, questioning the reliability of price formation mechanisms.
“These are fundamental principles and we will work this issue into our dialogue with regulators,” a WFE spokesperson told Reuters via email.
Both the SpaceX public offering and digital currencies represent “exciting stories,” according to Alex Edman, a London Business School professor studying investor behavior, though he cautioned people should fully understand their purchases.
“With SpaceX, investors may have done a little bit of research and conclude that space exploration is the future. With crypto, they may learn about potential use cases. But neither tells you what the asset is actually worth.”
Limited information exists about the driving forces behind pre-IPO contract volumes. Coinbase and Binance refused to disclose user numbers for SpaceX pre-IPO products, while Talos indicated public data couldn’t determine this information.
“It’s also very difficult to know who’s active in these markets, whether it’s your retail trader punting £10 or a proprietary trading desk of a hedge fund taking a position,” said A&O Shearman’s Noeltner.
“It’s better not to assume that these are only retail traders.”
