Crypto exchange Coinbase has launched pre-IPO perpetual futures, starting with a SpaceX contract that allows traders to gain price exposure to Elon Musk's aerospace giant ahead of its expected public listing next week at a $1.8 trillion valuation.
Coinbase's pre-IPO perps are USDC-settled contracts with 24/7 trading, no expiry, no rollover, and automatically convert into a standard perp contract if and when a company completes an IPO, the company said Thursday.
A Coinbase spokesperson told The Block that pre-IPO perps offer up to 5x leverage. By comparison, Coinbase's standard stock perpetual futures offer up to 10x leverage, while ETF perpetual futures offer up to 20x leverage.
Coinbase said the SpaceX listing is only the first in a planned pipeline of pre-IPO perps covering sectors including technology, artificial intelligence, energy, and space.
Pre-IPO perps have grown in popularity in recent weeks, particularly after TradeXYZ, a Hyperliquid-based decentralized perp platform, launched pre-IPO perp trading with Cerebras, an AI chipmaker and potential Nvidia competitor, as The Block reported recently. Pre-IPO perps give retail traders exposure to private companies, a market historically reserved for accredited investors and private funds. But notably, since pre-IPO perps are derivative contracts, they do not provide equity ownership, voting rights, or any direct claim on company shares.
With a slew of anticipated tech and AI IPOs this year, a growing number of crypto platforms, including centralized and decentralized exchanges, have launched pre-IPO perpetual futures in recent weeks, including Binance, OKX, Bitget, Crypto.com, and Ventuals.
The risks of pre-IPO markets were highlighted last week when Ventuals' SpaceX contract briefly fell about 45% after incorrect price data was published by an external oracle provider. The drop triggered liquidations for some traders, leading Ventuals to compensate affected users and review its pricing system.
"Pre-IPO perpetual futures significantly differ from standard perpetual futures, carrying unique considerations and posing elevated risks. These markets are characterized by a valuation-based index price mechanism and IPO conversion risk, and are more prone to lower liquidity, higher volatility, and increased liquidation risk," Coinbase warned.
Coinbase's pre-IPO perps are available to eligible Coinbase Advanced users in supported jurisdictions, the spokesperson said, noting that access is not available in the U.S., Canada, the United Kingdom, Singapore, India, Australia, and other restricted markets.
Coinbase already offers standard crypto perps for eligible users in supported jurisdictions outside the U.S. through Coinbase International Exchange for institutions and Coinbase Advanced for retail. In the U.S., Coinbase offers Commodity Futures Trading Commission-regulated perpetual-style futures through Coinbase Derivatives Exchange.
Separately, last week, Coinbase Financial Markets became a CFTC-regulated U.S. futures commission merchant, enabling institutional clients to access global crypto perpetual futures and options markets, including Deribit, under new CFTC guidance.
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