Pre-IPO liquidity squeeze is hitting tech stocks and crypto. Analysts say the market retreat is not random. Instead, it follows SpaceX’s record‑breaking public offering.
Why a pre-IPO liquidity squeeze is happening now
SpaceX’s IPO (SPCX) has attracted over $250 billion in invest or demand. For context, the company is seeking to raise only 75 billion. Consequently, the offering is oversubscribed by nearly four times.
Reuters reported that long‑only funds have placed “sizable orders.” Pricing is expected on Thursday. Nevertheless, demand figures can still shift before then because some large institutional investors tend to submit orders late.
The IPO values SpaceX at $1.8 trillion. Therefore, it would be the largest public offering ever.
Tech stocks tumble as liquidity rotates
US tech stocks have tumbled recently. Meanwhile, crypto markets have shed more than $180 billion over the past week.
Some analysts speculate that the market retreat is partially driven by selling to raise funds for the SpaceX IPO.
They are saying that they are seeing this exactly as the classic pre-mega-IPO liquidity squeeze playing out in real time. The tanking in crypto and tech stocks right now isn’t random, it’s the direct ‘IPO tax’ from SpaceX’s record‑breaking deal.
They think that the excitement is “sucking liquidity out of correlated risk assets today.” Specifically, crypto is hit hardest because it is the most retail‑driven and sentiment‑tied to growth narratives. However, he believes this is not the start of a broader bear market. Instead, it is a “temporary rotation.”
Crypto exchanges rush to offer pre-IPO perps
Crypto exchanges have been quick to capitalize on the IPO hype. For instance, Binance, Coinbase, Kraken, and Bybit launched pre‑IPO perpetual futures for SPCX this month.
Shunyet Jan, head of spot and derivatives at Binance, said the strong early traction “reflects growing user interest.” Since launch, Binance’s product has generated $2.1 billion in cumulative trading volume in just 18 days. Participation spans more than 130 countries.
Meanwhile, decentralized exchange Hyperliquid has seen $70 million in trading volume over the past 24hours. The current price for its synthetic SpaceX pre‑IPO perps is $157, down from $210 at launch. Therefore, open interest exceeds $115 million on Hyperliquid alone. The current implied valuation is $1.97 trillion.
