Analysis: Why the blockbuster SpaceX IPO may spell more bad news for crypto
10/06/2026 11:00
* Retail investors seen shifting funds from crypto to SpaceX
and upcoming AI IPOs
* Speculative AI stocks attractive to same cohort of
investors who dabble in crypto
* Crypto faces additional pressure from recent bitcoin
sell-off and ETF outflows
* Analysts warn rising rates and hot IPOs make crypto
recovery doubtful in near term
By Hannah Lang
June 10 (Reuters) - SpaceX's much-anticipated $75 billion
initial public offering, set to be the largest ever, will likely
keep cryptocurrency prices in the doldrums as retail investors
attracted to new and risky artificial intelligence stocks
scramble to get a slice of the action.
Celebrity billionaire Elon Musk's rocket and satellite
communications company - which merged with his AI startup xAI
earlier this year - is expected to fetch a valuation of around
$1.75 trillion, sparking a Wall Street and media frenzy.
The company has set aside up to 30%, or $22.5 billion, of shares
for retail investors, Reuters and other outlets have reported,
in a rare move for a blockbuster IPO that historically have been
dominated by institutional investors.
That has helped drive rotation out of risk assets like
cryptocurrencies, as retail and other investors free up cash to
buy shares in SpaceX - as well as hotly anticipated IPOs from
OpenAI and Anthropic that are expected to follow this year, said
analysts and crypto executives.
Bitcoin, the world's largest cryptocurrency, was last trading
near the $60,000 level, down about 52% from its all-time high of
$126,223 in October.
"Crypto is a funding currency for a lot of this," said Spencer
Hallarn, global head of over-the-counter trading at GSR, a
crypto trading firm and liquidity provider. "We've got to find
$75 billion for this IPO, and it's got to come from somewhere."
With SpaceX, Musk revived space travel, turning cosmic
exploration into thriving businesses, but it is eyeing an even
bigger opportunity in building AI for enterprises.
SpaceX's IPO prospectus shows that the company overall is
unprofitable, and its lofty valuation assumes years of rapid
growth driven by its plan to become an AI powerhouse, in
addition to other futuristic ambitions such as Mars missions and
launching AI data centers in space.
That makes it the type of risky and speculative AI bet that
appeals to the same cohort of retail investors that drive
sentiment in crypto markets, crypto executives said.
"A SpaceX IPO would likely pull some capital out of crypto, at
least initially. Both compete for the same pool of risk
capital," said Thomas Puech, CEO of crypto trading firm INDIGO,
adding that relative to crypto, AI is "the 'sexier' trade at the
moment."
THE WORST TIME FOR CRYPTO
SpaceX's planned Friday Nasdaq debut could not come at a worse
time for cryptocurrencies. Bitcoin tumbled 15% last week, the
most since November 2022, when crypto exchange FTX imploded.
Adding to the pressure, Michael Saylor's Strategy MSTR.O ,
the largest corporate holder of bitcoin that has been
relentlessly bullish on the token for years, disclosed last week
that it had sold some of its holdings for the first time since
2022.
"It really is out of favor with investors," said David
Morrison, senior market analyst at Trade Nation, in a research
note, adding bitcoin has lost its luster and novelty for many
investors. "Excitement over the SpaceX IPO isn't helping
either."
Cryptocurrencies soared after U.S. President Trump's
crypto-friendly administration took power, but prices nosedived
in October when Trump threatened to impose new tariffs on China,
and have struggled to regain their footing since. U.S.
semiconductor stocks .SOX , meanwhile, have surged 170%.
Outflows from crypto exchange-traded funds have also soared,
reaching more than $2 billion in May, said Sui Chung, CEO of
crypto index provider CF Benchmarks, which provides the index
for several of those ETFs. Those products, which were first
launched in 2024, had at their outset boosted crypto prices and
institutional participation in the market.
"Obviously, some of the money that has left crypto is
finding its way into the equity market," he said, while
cautioning there is no way to be certain that it will flow
directly into SpaceX.
With other hot IPOs in the pipeline, and growing market
expectations that the U.S. Federal Reserve may hike interest
rates this year, which could push investors toward safer,
yield-generating assets, it is difficult to see crypto soon
recovering, said Hallarn.
"It's really hard to see some significant tailwinds," he
said.
(Reporting by Hannah Lang in New York; Additional reporting by
Elizabeth Howcroft in Paris; Editing by Michelle Price and Nick
Zieminski)
((mailto:Hannah.Lang@thomsonreuters.com;))