SpaceX will soon go public at a whopping valuation of $1.75 trillion. Recently, an updated S-1 was filed with the Securities and Exchange Commission, providing details on the initial public offering.
In advance of the float, Coinbase (NASDAQ:COIN) is seeking to provide investors with exposure to the offering by offering pre-IPO perpetual futures. Coinbase packages its security as part of its mission to become an “everything exchange.” Unlike options, perpetuals do not have an expiration date and could be riskier than a put or a call. At the same time, the leverage can provide more exposure, but if markets turn against you, you can lose big.
Co-CEO of Coinbase Institutional, Brett Tejpaul, says the new product features an auto-transition mechanism because the perp does not expire when SpaceX goes public.
“Continuous exposure from private to public, with no disruption, no rollover, and no action required. That’s the kind of seamless, institutional-grade innovation traders deserve, and Coinbase delivers. SpaceX is just the beginning, we’re building a systematic pipeline of pre-IPO perp listings that will span across tech, AI, energy, and space,” says Tejpaul.
The perpetual is settled in USDC via existing crypto rails, with an investor benefitting if SpaceX’s value moves higher. Of course, SpaceX already carries a huge valuation, and a drop in the share price or stagnation could lead to a poor outcome.
When the IPO takes place, the perp will transition to a “regular perp.”
Coinbase says the SpaceX perp is just the first of many.
On X, Coinbase CEO Brian Armstrong says that pre-IPO perps are a good way for retail to gain exposure to a private company before they go public. Unfortunately for US investors, you will not have the option right now as the perp is not yet available to the domestic market.
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