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Bitcoin could face additional downside pressure as investors position for what is expected to become the largest public offering in history. Market analysts say the anticipated SpaceX IPO may divert capital away from cryptocurrencies and toward artificial intelligence and technology sectors.
Elon Musk’s aerospace company is reportedly targeting a valuation of approximately $1.75 trillion when it enters the public market. Industry reports indicate that around 30% of the offering could be allocated to retail investors, representing roughly $22.5 billion in shares.
This unusually large retail allocation has drawn attention from investors who typically participate in cryptocurrency markets.
Experts suggest that investors seeking high-growth exposure may sell portions of their crypto holdings to participate in SpaceX. Spencer Hallarn, Global Head of Over-the-Counter Trading at GSR, said that an IPO of this magnitude would require substantial capital and that some of that funding could come from digital asset markets.
The concerns come as Bitcoin continues to test key support levels amid weak market sentiment. BTC has struggled to regain momentum after a sharp decline from its previous all-time high, while broader crypto markets remain under pressure.
Industry leaders point to rising investor interest in artificial intelligence as a driver of potential capital rotation. Thomas Puech, CEO of crypto firm INDIGO, said that cryptocurrencies and AI-related equities compete for the same pool of risk capital, adding that AI remains one of the most attractive investment themes in the current market.
Beyond IPO-related positioning, the sector has faced other challenges. Strategy, the largest corporate Bitcoin holder, disclosed the sale of 32 BTC, its first Bitcoin sale since 2022. The announcement contributed to negative market sentiment, though the company later purchased an additional 1,550 BTC.
Crypto investment products have also seen significant outflows, with more than $2 billion reportedly withdrawn from crypto ETFs during May. Sui Chung, CEO of CF Benchmarks, said some of the capital leaving digital assets is moving into equities, but noted there is no definitive evidence that funds are flowing directly into SpaceX shares.
As the SpaceX IPO approaches, investors are expected to monitor whether capital continues shifting from cryptocurrencies into technology and AI-focused investments, which could contribute to further volatility across the digital asset market in 2026.
