Investors can ‘buy’ SpaceX early with Coinbase perpetual futures on pre-IPOs
The Coinbase logo is displayed on a smartphone with exchange percentages in the background.
Omer Marques | SOPA Pictures | Light Rocket | Getty Images
coinbase on thursday introduced a new product This starts with a perpetual futures contract tied to SpaceX, better known as a “criminal,” allowing customers to gain exposure to prices of private companies before they go public.
Pre-IPOs allow investors to speculate on the value of a private company without owning shares. Coinbase’s first offering is the SpaceX Pre-IPO Perp, a derivative built into its USDC stablecoin that tracks the private market valuation of Elon Musk’s space company. Product available to merchants outside the US only
The announcement comes at a time when companies are staying private for longer periods of time, with growing demand from retail investors to access high-profile private companies before they reach public markets – an opportunity historically reserved for venture capital firms, private equity funds and accredited investors.
“Access to high-conviction, uncorrelated exposure has never been more valuable to investors,” said Liz Martin, head of derivatives at Coinbase. “We’ve built the most trusted platform for crypto trading; now we’re putting those same rails to work on price exposure for some of the world’s most exciting private companies before they ever touch a public exchange. This is a new asset class built for this era of markets.”
Binance, the world’s largest crypto exchange, also entered the pre-IPO criminal market with SpaceX last month.
The launch also comes against the backdrop of a slump that saw new lows in crypto prices this week. Bitcoin price fell to $61,340.71 on Thursday, its lowest level since February 6. Pre-IPO custodians offer Coinbase a way to expand its vision of an “Exchange for Everything” that offers things users will always want to trade, even in sluggish or calm markets. The idea is that diversification in trading offerings will help the company continue generating revenue even as spot crypto trading slows.
Perps are a type of futures contract that allows investors to speculate on the price of an asset using leverage without an expiration date and without owning the underlying asset. They are one of the most popular ways to trade crypto, accounting for over 70% of volume on centralized global crypto exchanges, according to CoinGecko.
Coinbase says that after SpaceX goes public (which is expected next week), the pre-IPO permanent future will turn into a regular permanent future at SpaceX.
A land grab on criminals is underway after the US derivatives regulator, the Commodity Futures Trading Commission, approved the first US-listed criminals held in Kalshi last week.
Coinbase said SpaceX is the first of a planned pipeline of pre-IPO deals covering hot sectors like artificial intelligence, energy and space.
