SpaceX Is Already Trading…

SpaceX is set to be the largest IPO ever recorded.

Estimates are that the company will be worth around $1.75 to $2 trillion on IPO day. It’s expected to raise $50 to $75 billion in the process.

That would surpass the previous record set by Saudi Aramco’s 2019 IPO. The national oil company of Saudi Arabia raised $29.4 billion at a $1.7 trillion valuation.

And we’re only a few weeks away from June 12, when shares are expected to go live on the Nasdaq.

But here’s what few know: You don’t have to wait until shares are on the Nasdaq to gain exposure to the price action.

In some sense, the SpaceX IPO already happened…just not in the way you would expect.

The 6^th Largest Public Company

Trade.xyz is a permissionless perpetual exchange on Hyperliquid.

It offers onchain representation of real world assets like stocks, ETFs, foreign currencies, and commodities.

Over the past eight months, the exchange has seen $2,100 billion in volume across 175,000 wallets. These are meaningful figures. And it’s helped make Trade.xyz one of the largest asset deployers on the Hyperliquid platform.

But what it did this month is set to take it from being a small onchain exchange to a key player in the biggest venue in finance. That’s because Trade.xyz allows investors to gain exposure to SpaceX’s price action today. Yes, right now.

To understand how this works, let’s rewind to another hot IPO that just hit— Cerebras Systems.

If you’re a long-time reader of The Bleeding Edge you’ve likely heard this name before. Jeff Brown even covered it most recently on May 15 in Game on For IPOs.

It’s a high-growth AI semiconductor company known for its wafer-scale semiconductors designed for inference.

The company went public on May 14 and closed at $311.07 after its first day of trading. This came after selling shares at $185 the day before.

It was a massive move. Cerebras Systems’ IPO was the largest for a U.S. tech company since Uber’s debut in 2019.

But here’s the thing…

Cerebras Systems closed at $314 per share on another venue…two weeks earlier.

Cerebras Systems (CBRS) went live on Trade.xyz on May 1.

This is thanks to Trade.xyz’s new pre-IPO category. These are instruments that are not backed by the actual asset themselves. But instead, it’s a synthetic perpetual contract that uses funding rates to help keep the contracts fairly priced.

Traders can then speculate on a company’s value before the stock goes live.

And that’s what happened with CBRS.

What was so fascinating is how the synthetic contract price so closely mirrored the eventual IPO price. The contract was trading well above the IPO price tag in the days leading up to the stock’s first day of trading.

Source: Trade.xyz/?market=CBRS

Which is why this next part is worth mentioning…

SPCX went live on May 17.

Again, these are not actual shares in SpaceX. It’s a synthetic instrument tied to the most anticipated IPO in history. And it ended its first trading day at $216 per SPCX.

This is remarkable.

Trade.xyz lists the fully diluted share count of SpaceX to be 11.87 billion shares. Meaning after its first day of trading on Trade.xyz, the company was valued at more than $2.56 trillion.

If these synthetic contracts come close to mirroring the eventual SpaceX IPO—the way they did with Cerebras—then it implies SpaceX will become the world’s sixth largest publicly traded company, just behind Microsoft and Amazon.

The Race is Accelerating

This is an innovative market.

It doesn’t require access to underlying shares via private placements. It’s merely a market where traders can speculate using perpetual futures contracts.

Now, I wouldn’t recommend trading these pre-IPO contracts. And they shouldn’t be used to hedge a position we may hold in these companies.

That’s because Trade.xyz is very new. It’s not even a year old. The trading venue still lacks a lot of the disclosures and proper documentation around edge cases (i.e., how do the markets handle splits, acquisitions, delays). And the founder is anonymous.

And while these reasons don’t mean the product will fail… they just suggest the exchange needs to show how it handles adverse moments or contentious issues.

But these contracts are very useful for another reason: They give us an idea what is going on in companies nearing their IPO day. It also showcases just how exciting the world of finance will be as it moves onchain.

In fact, the Securities and Exchange Commission (SEC) just stated on May 18 that it’s preparing to release its innovation exemption for tokenized stocks.

It’s a framework that would open the floor to trading public company shares on public blockchains.

The Depository Trust & Clearing Corporation even announced its tokenization service will be going live in July of this year.

That date coincides with the expected signing of the CLARITY Act, a comprehensive digital asset regulatory bill.

The race is on.

Innovations like Trade.xyz will become more commonplace in the future. And we’re likely to see new markets spring up onchain that would be deemed impossible in our current financial infrastructure.

We should be excited for what the future holds.

SpaceX’s IPO is the latest example of what innovation has in store for us onchain.

Your Pulse on Crypto,

Ben Lilly, Editor Chain of Thought