Bitcoin Risks Another Windfall After Elon Musk’s SpaceX IPO, Analysts Say

Bitcoin may encounter further downward pressure as investors brace for what is projected to be the largest public offering ever. The long-awaited SpaceX launch could draw funding from cryptocurrencies toward the AI industry, according to analysts.

Analysts Expect SpaceX IPO To Worsen Bitcoin, Crypto Market Scene

The valuation of the rocket and satellite company that Elon Musk founded is projected to be around $1.75 trillion when it goes public. SpaceX has reportedly reserved 30% of the IPO offering for retail investors, which is worth around a $22.5 billion. Experts believe it is an unusual practice for a blockbuster offering.

The SpaceX IPO is mostly attracting those investors who generally invest in crypto and other digital assets, per market participants.

“Crypto is a funding currency for a lot of this,” said Spencer Hallarn, global head of over-the-counter trading at GSR. “We’ve got to find $75 billion for this IPO, and it’s got to come from somewhere,” he added.

His comments appear as Bitcoin is testing key support levels amid a bearish market sentiment. The BTC price was recently on the verge of trading near $61,800, over 50% below its record high set last year. Bitcoin price also experienced its biggest weekly drop since late in 2022.

Crypto traders who want to get exposure to the high-growth artificial intelligence space may help drive capital rotation, according to industry executives.

A listing of SpaceX is likely to take money away from digital assets in the short term, said Thomas Puech, CEO of crypto firm INDIGO. “Both compete for the same pool of risk capital,” he said, according to Reuters. Moreover, Puech added that AI is currently “the ‘sexier’ trade at the moment.”

The Strategy’s BTC Sale Drama

The pressure on the crypto market has grown in the past few weeks. Strategy, the biggest corporate owner of Bitcoin, revealed that it had previously sold 32 BTC for the first time since 2022. It created a negative sentiment in the market.

At the same time, there have humongous outflows from the crypto ETFs with over $2 billion withdrawn from the products during May, per CF Benchmarks. Even Strategy buying another $1,550 BTC this Monday didn’t affect the mood affect.

Sui Chung, CEO of CF Benchmarks, indicated that money is leaving the crypto market and being invested in equities. “Obviously, some of the money that has left crypto is finding its way into the equity market,” he said. However, he added that there is no guarantee that the money is going directly into SpaceX stock.

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