Crypto traders wanted $1 billion in SpaceX shares. Tokenization could not deliver

Crypto traders poured money into products tied to Elon Musk’s rocket and satellite business SpaceX (NASDAQ: SPCX), but blockchain markets still could not give them the same thing Ron Baron bought: $1 billion worth of SPCX.

The public debut created a funny split, as traditional investors received shares while crypto users received price exposure through perpetual futures, which were supposed to track the listing closely, yet they sadly did not turn token holders into owners of SPCX.

At the time of its launch, the IPO had a value of about $2 trillion, closing higher than $2.1 trillion after its initial trading period. Close to 500 million shares were traded.

SpaceX was listed at $150 and went up to as high as $176.52, ending up at $160.95. Banks were negotiating the terms of the deal amid speculations that the value was close to $175.

Hyperliquid and Binance let traders price SpaceX before Wall Street opened

However, Hyperliquid and Binance derivatives, which are known as perps, remain open indefinitely. They are popular among foreign traders, but they are finding their way into the regulated market of the United States as well. The Commodity Futures Trading Commission has just authorized the listing of bitcoin perps on prediction platform Kalshi.

Traders on the Hyperliquid exchange were buying and selling SpaceX futures worth close to $180 during opening bell. Right before the stock began trading at $150, those futures declined to about $153. The difference between them was too small to ignore – crypto traders managed to define a relevant price range.

Hyperliquid saw more than 7 million perp trades on Friday related to SpaceX, valued at over $1.2 billion. This was derivative trading rather than ownership, meaning the traders profited or lost depending on the price but did not gain any voting rights or claims on the firm.

It came amid tough competition from the exchange companies as well. Shares of CME Group (CME), Cboe Global Markets (CBOE), and Nasdaq (NDAQ) fell last month when Kalshi said it will roll out regulated perpetual futures. It appears that event contracts and continuous derivatives are not easily ignored anymore for old players in the market.

However, the IPO itself went off quite smoothly compared to the usual Wall Street procedure, considering its size. The crypto market still offered some trading instruments even amid tough times for the industry. Bitcoin has been underperforming equities for over 18 months, and the treasury company Strategy (MSTR) is down significantly. However, the HYPE token issued by Hyperliquid gained over 150% this year according to CoinMarketCap.

Ron Baron buys real shares while crypto traders settle for contracts

Early investor Ron Baron did not sell into the debut. Baron Capital added another $1 billion of SpaceX stock, taking the firm’s total position to about $25 billion. Ron said the purchase protected the firm from dilution as SpaceX issued new shares to public investors.

“I didn’t want to get diluted,” Ron said. “I wanted a billion dollars to keep our percentage the same …. I’m an investor in a business. I’m not buying and selling or trading.”

First entering SpaceX in 2017 via tenders offered to employees, when the firm was valued at less than $22 billion, Baron Capital would eventually participate in 27 capital-raising events, creating one of the investment vehicle’s largest positions in an unlisted company.

To CNBC on Monday, Ron said, “I think we’re going to make hundreds of billions of dollars.” He added, “What they’ve done isn’t possible for anyone else to accomplish. Not possible. And so he’s at least 10 years ahead of everyone else, as far as making satellites, as far as making rockets, as far as building networks.”

As of March 31, SpaceX made up 33% of the $10.4 billion Baron Partners Fund and 25.5% of the Baron Asset Fund. When combined with Baron Capital’s large stake in Tesla (TSLA), companies run by Elon account for about half of the money in some Baron portfolios.