Why the Blockbuster SpaceX IPO May Spell More Bad News for Crypto
By Hannah Lang, Reuters — June 10, 2026
SpaceX’s highly anticipated initial public offering (IPO), projected to be the largest ever at an estimated valuation of $1.75 trillion, could inadvertently deepen the challenges facing the cryptocurrency market. The blockbuster $75 billion IPO, scheduled for a Nasdaq debut on June 12, is attracting a surge of retail investors eager to gain exposure not only to Elon Musk’s space and satellite communications venture but also to the company’s recent merger with Musk’s AI startup, xAI. This investor enthusiasm may be diverting funds away from cryptocurrencies at a moment when the crypto market is already under significant strain.
Retail Investors Flock to SpaceX and AI Stocks
One of the standout features of the SpaceX IPO is its unusually large allocation of shares for retail investors. Up to 30 percent of the offering—amounting to $22.5 billion—has been set aside for everyday investors, a rare move for such a significant IPO that historically favors institutional buyers. This unusual accessibility has intensified competition among investors for capital, contributing to a rotation away from riskier assets such as cryptocurrencies.
Analysts point out that retail traders interested in speculative and potentially high-growth sectors are shifting their focus from crypto assets to promising new AI ventures. The excitement around upcoming IPOs from AI companies like OpenAI and Anthropic further compounds this effect, as these businesses are increasingly seen as “sexier” investments compared to cryptocurrencies.
Crypto Market Under Pressure
Bitcoin, the world’s largest cryptocurrency, has seen a troubling decline, currently trading around $61,852 — a sharp drop of approximately 52 percent from its all-time high of $126,223 reached in October 2024. This slump is worsened by a recent spike in outflows from cryptocurrency exchange-traded funds (ETFs), which collectively saw more than $2 billion withdrawn in May alone.
Adding to crypto’s woes, Michael Saylor’s Strategy (MSTR.O), known as one of the largest corporate holders of bitcoin and a strong proponent of the token for several years, disclosed last week that it sold part of its bitcoin holdings for the first time since 2022. This move signals a lack of confidence and contributes to investor skepticism.
“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. “We’ve got to find $75 billion for this IPO, and it’s got to come from somewhere.” Hallarn further noted that with multiple headline-grabbing IPOs and expectations of higher U.S. Federal Reserve interest rates, investors may shift toward safer, yield-generating assets rather than volatile cryptocurrencies.
The Risky Promise of SpaceX
SpaceX’s IPO prospectus reveals the company is currently unprofitable, with its valuation heavily reliant on aggressive long-term growth plans. Beyond its space exploration ambitions—such as Mars colonization and satellite internet expansion—the company is positioning itself as an emerging AI powerhouse, aiming to launch AI data centers even in space. This blend of ambitious space and artificial intelligence initiatives appeals to the same risk-tolerant retail investor base that has traditionally fueled the cryptocurrency market.
“A SpaceX IPO would likely pull some capital out of crypto, at least initially,” said Thomas Puech, CEO of crypto trading firm INDIGO. “Both compete for the same pool of risk capital.” Comparing the two sectors, he added that “AI is the ‘sexier’ trade at the moment,” reflecting the current investor sentiment pivoting toward AI technologies.
Crypto Faces an Uphill Battle
The timing of the SpaceX IPO couldn’t be worse for the crypto sector. Bitcoin recently experienced a 15 percent drop last week—the most significant since the collapse of crypto exchange FTX in November 2022. The cryptocurrency market’s struggles have been exacerbated by new regulatory uncertainties and waning investor enthusiasm.
Further dampening confidence, the excitement around the SpaceX IPO highlights the growing divide between the speculative potential of AI and space ventures versus the increasingly volatile and uncertain crypto landscape. While cryptocurrencies initially surged following the pro-crypto policies of previous U.S. administrations, political and economic developments—including potential new tariffs and Fed rate hikes—have cooled investor sentiment.
“Excitement over the SpaceX IPO isn’t helping either,” said David Morrison, senior market analyst at Trade Nation. “Bitcoin has lost its luster and novelty for many investors.”
Looking Ahead
With several highly anticipated IPOs in the pipeline and the Federal Reserve expected to raise interest rates to curb inflation, analysts suggest the crypto market is unlikely to experience a near-term recovery. As funds flow to newly public companies like SpaceX and emerging AI players, cryptocurrencies face growing headwinds both from shifting investor preferences and broader macroeconomic factors.
In this competitive landscape for risk capital, the SpaceX IPO represents a double blow for crypto: attracting investors who might otherwise turn to digital assets, while emphasizing the banking of speculative bets on AI and space exploration as the next frontier.
Hannah Lang covers financial technology and cryptocurrency for Reuters. She is based in Washington, DC.