Coinbase has started offering pre-IPO perpetual contracts, and the first underlying asset is SpaceX. The crypto exchange's new derivatives let traders speculate on the private rocket builder's valuation ahead of its planned public listing.
Perpetual contracts, or perps, are derivatives that never expire. Unlike traditional futures, they don't require rollover. Traders pay a periodic funding rate to keep the position open. In a pre‑IPO perp, the price is tied to the company's estimated market value before its stock hits an exchange.
SpaceX, founded and controlled by Elon Musk, is set for an initial public offering. No timetable has been announced, but the IPO is expected to be one of the biggest in history. The company's Starlink satellite network already generates revenue, and its Starship rocket program has captured global attention.
How pre-IPO perps work in practice
When a trader opens a long position on a SpaceX pre‑IPO perp, they're betting the company's eventual IPO valuation will be higher than the current contract price. A short position bets the opposite. The contract price moves based on supply and demand among traders, news about the company, and any private market transactions that leak out.
Because there's no public stock price, the perp's price can be volatile. A single funding round or a successful launch can swing it significantly. Traders need to stay informed. The funding rate itself can be a wild card — with no clear index price to anchor to, the exchange sets it based on internal models, and that can lead to higher costs for positions held over weeks or months.
Why SpaceX and why now
SpaceX is one of the most anticipated IPOs in recent memory. Pre‑IPO trading has traditionally been limited to institutions and wealthy investors through private secondary markets. Coinbase's perps open the door to a wider audience – anyone with a Coinbase account can take a position.
That's a big change. Retail traders previously had few ways to bet on SpaceX before its IPO. Now they have access to a derivative that reflects the market's view of the company's value. The move also signals Coinbase's ambition to expand beyond crypto into derivatives tied to traditional private companies.
The trillionaire stake
Current estimates suggest Elon Musk could become the world's first trillionaire after SpaceX goes public. His stake in the company is substantial. If the IPO assigns a high valuation, his net worth could cross the $1 trillion threshold.
The pre‑IPO perps offer a real‑time indicator of what the market thinks that valuation might be. They won't determine the IPO price, but they will show sentiment. For now, the contracts are a bet on both the company's growth and the hype around its founder.
What's still unknown
Coinbase has not disclosed how it will settle the contracts once SpaceX shares start trading. Perps typically use an index price for settlement, but with no public stock, that index is unclear. The company will likely announce a plan closer to the IPO.
The contracts are live now. Traders can open positions. The next big milestone will be any word from SpaceX about its IPO filing — until then, the perps let everyone try to guess the outcome.
