For years, ordinary investors could only watch from the outside as SpaceX grew into one of the most valuable private companies on earth. On Thursday, Coinbase said it would change that — sort of. The cryptocurrency exchange announced a new product that lets traders place bets on the rising or falling value of SpaceX before the rocket company ever lists on a stock exchange. The catch: you are not actually buying anything close to a share.

The product is called a pre-IPO perpetual futures contract, or “perp” for short. In plain terms, it is a side bet on where a company’s value is heading. According to Coinbase, the SpaceX contract tracks the company’s estimated private-market valuation, trades around the clock with no expiration date, and settles in USDC, a digital dollar token. Traders can open or close a position whenever they want, and they can use up to 5x leverage — meaning a small amount of money controls a much larger bet.

Here is what it is not. The contract carries no ownership of SpaceX, no voting rights, no dividends, and no claim on actual shares. It is purely a wager on price. If you guess the direction right, you make money. If you guess wrong, you lose — and leverage means losses pile up faster than they would with plain stock.

The timing is deliberate. SpaceX, run by Elon Musk, is set to go public on June 12. The company filed its IPO terms this week, planning to sell about 555 million shares of Class A common stock at $135 each. That would raise roughly $75 billion and value the company near $1.75 trillion — making it the largest stock-market debut in history, dwarfing the $29.4 billion raised by Saudi Aramco in 2019.

Coinbase built in a feature for that moment. When SpaceX completes its IPO, existing pre-IPO positions automatically convert into a standard SpaceX futures contract tied to the public stock price. Traders do not have to do anything; their bet simply rolls from the private phase into the public one.

There is one important limit. The product is available only to eligible traders outside the United States through a Coinbase unit based in Bermuda. American customers cannot buy it. That restriction reflects the murky regulatory status of these contracts, which blur the line between a derivative, a private-market investment, and a crypto product.

Why is Coinbase doing this? The company describes it as part of its push to become an “everything exchange,” a single place to trade not just cryptocurrencies but exposure to almost any asset. SpaceX is only the first listing. Coinbase said it plans a pipeline of pre-IPO contracts spanning technology, artificial intelligence, energy, and space — the hottest corners of private investing, where demand has long outrun access.

It is also playing catch-up. Coinbase is the latest entrant in a market that has heated up quickly. Crypto.com launched a similar SpaceX product on May 12, Hyperliquid followed on May 18 and reportedly generated $33 million in first-day trading volume, and Binance, the world’s largest crypto exchange, entered on May 21 and reportedly saw more than $280 million in trading within five days.

That eagerness is the real story for everyday investors, and the reason for caution. Pre-IPO shares have traditionally been reserved for venture capital funds, private equity firms, company employees, and wealthy accredited investors. Most people have had no way in. These new contracts crack that door open — but they do it through one of the riskiest tools in finance.

A few things are worth understanding before anyone is tempted. Different exchanges price their SpaceX contracts using different methods, so the “value” you are betting on is not standardized and can move independently of the company’s eventual stock price. Leverage cuts both ways and can wipe out a position quickly. And because the contracts are settled in crypto rather than dollars, traders also take on the risks and mechanics of the cryptocurrency market itself.

For Coinbase, the business logic is clear. The company, which trades on the Nasdaq under the ticker COIN, earns fees on every trade, and a blockbuster like the SpaceX IPO is a once-in-a-generation draw. By letting traders take positions days before the listing, it captures activity that would otherwise wait for the opening bell — or never reach retail traders at all.

The broader shift is the one to watch. Private companies are staying private far longer than they used to, leaving public investors locked out of the fastest-growing names for years. Products like this are Wall Street’s workaround — a way to sell the feeling of early access without the ownership that traditionally came with it.

Markets & Technology — JBizNews Desk

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