SpaceX Hype Fuels $3.2B in Crypto Derivative Trading

Crypto exchanges have been capitalizing on the hype surrounding Elon Musk's SpaceX by offering pre-IPO derivatives, allowing traders to make high-risk bets on the company's future share price. These instruments, known as 'pre-IPO perpetual futures,' are priced with reference to SpaceX's latest disclosed pre-IPO valuation and offer leverage of up to 5x.

According to data provider Talos, trading volume for these derivatives from May 17 to Wednesday was around $3.2 billion, with $390 million in open interest. Binance reported that its SpaceX pre-IPO perps saw $2.1 billion in trading volume in just 18 days.

Proponents of these derivatives claim they are a tool for price discovery and help more people access the U.S. stock market's gains, but critics argue they are risky due to their low liquidity, high volatility, and lack of direct link to the underlying shares.