Is SpaceX IPO bullish or bearish for Bitcoin? (The answer was doubtful)

SpaceX’s IPO is a “double-edged sword” for crypto, one of the AIs said.

After filing with the SEC in mid-May, the Elon Musk-led company made history Friday, debuting with a massive valuation of nearly $2 trillion on Wall Street.

The spaceflight and telecommunications giant recently announced that it continues to hold Bitcoin on its balance sheet. The question now is whether this public listing is bullish or bearish for BTC in the short and long term.

Bear case

The first AI we asked for its opinion was Gemini, who began by emphasizing how SpaceX’s IPO is a “watershed moment” for all financial markets. Interestingly, he believes that the short-term narrative for BTC is primarily bearish.

The reason is that raising $75 billion at its astronomical valuation means capital “must be siphoned elsewhere.” SpaceX’s IPO presents at least one particularity, since an unprecedented 30% of the offering was reserved for retail investors. Daily investors and crypto-native speculators “scrambled to raise liquidity to secure their allocation of SPCX at the fixed entry price of $135.”

Gemini believes that this liquidity often comes from other risky, high-beta assets, such as crypto. This may be why bitcoin and alts were abandoned in the last few weeks leading up to the event, as “portfolios were aggressively rebalanced.”

“If a trader needs liquid capital to buy into the biggest tech narrative of the decade, taking profits on BTC, ETH, or XRP is one of the quickest ways to do so,” Gemini said.

ChatGPT largely agreed, noting that “the SpaceX IPO could actually be bearish for bitcoin” in the short term. He also warned that a large portion of the SPCX’s investments could come from old crypto positions.

“When a once-in-a-generation IPO appears, some of the money that could have been invested in BTC, crypto stocks, or altcoins may temporarily be transferred into the new stock story,” the OpenAI platform warned.

Long term bullish

Both AIs, however, argued that the long-term situation is “more optimistic.” ChatGPT said the main reason was SpaceX’s own exposure to BTC. As reported recently, the company said in its IPO filing that it still holds 18,712 BTC on its balance sheet, making it one of the largest companies holding the asset.

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“If SpaceX becomes one of the largest public companies in the United States while holding a billion-dollar position in bitcoin, it strengthens the argument that BTC has become a legitimate treasury asset for large companies.”

Gemini added that an oversubscribed $1.75 trillion tech IPO is the ultimate indicator of risk, as it proves there is a “voracious and insatiable appetite for speculative, future-focused technologies.” When traditional stocks demonstrate this level of aggressive capital deployment, it has historically carried over into crypto.

Additionally, he noted that the IPO would generate billions in realized gains for early private investors, venture capitalists and SpaceX employees. Historically, new tech millionaires seek asymmetric bets to park their capital, which could provide new liquidity to bitcoin and some major altcoins.

In conclusion, Gemini said the IPO would be a “double-edged sword” for Bitcoin, where bearish sentiment might prevail at first, but on a larger scale seems more favorable. ChatGPT shares a similar opinion, especially if SpaceX maintains its exposure to BTC.