June 10 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…