A Historic Week for Public Markets
Something genuinely unprecedented is unfolding across global markets. SpaceX is reportedly preparing the largest initial public offering in human history, with a target valuation that has been boosted to more than $2 trillion. If it reaches that figure, the company would be worth more than Meta and Tesla combined, and larger than all but five companies in the entire S&P 500. The offering, structured around roughly $85 billion, is set to launch on June 12th — a date that may well be remembered as a turning point in capital markets.
But SpaceX is only one piece of a much larger story. We are living through what is shaping up to be the biggest year of IPOs and equity issuance in our lifetime. In the history of the world, there has never been an $80 billion IPO — and now we are seeing them arrive one after another. OpenAI, Anthropic, Google, and SpaceX are all raising enormous sums in roughly the same window. Anthropic is conducting an $80 billion raise. Even Google — a company that generates effectively infinite cash — is going to market to ask for $80 billion more, something no one ever thought they would see.
The $400 Billion Capital Rotation
The mechanism driving market behavior right now is a massive capital rotation. In 2026, something on the order of a trillion dollars is expected to flow into AI and the hyperscalers. Over a span of just a few weeks, roughly $400 billion of capital is being raised and funneled into the AI buildout. This is absorbing capital at a historic scale, and it is creating temporary pressure across global markets.
Here is the crucial point: investors are not financing the AI trade exclusively with crypto. Crypto represents only one or two percent of the overall market. But every investment bank on Wall Street is simultaneously marketing the Anthropic deal, the OpenAI deal, the Google deal, and the SpaceX deal. Collectively, the market has to come up with $400 billion in cash. To raise it, institutions are selling whatever looks stable — private credit, public credit, software-as-a-service companies, and Bitcoin. Anything liquid and dependable is being sold and rolled into the hot new issues.
This is what creates the "liquidity vacuum." Over a recent 14-day period, roughly 1% of capital — around $4 billion — rolled out of the Bitcoin ETFs. That reallocation, undertaken to prepare for these massive IPOs, applied downward pressure on Bitcoin, which fell from around $82,000 to the $62,000–$63,000 range over about fifteen days. Whenever the price drops, social media tends to lose its mind, but the reason here is not complicated. It is simply a vacuum: an enormous demand for cash pulling liquidity out of every corner of the market. None of the market is immune to the resulting volatility — sometimes things surge, sometimes they crash.
Two Sellers Behind the Bitcoin Decline
The selling pressure on Bitcoin specifically comes from two identifiable sources.
The first is momentum chasing. Capital is flowing out of crypto and into AI because investors want exposure to the hottest trade. This is the visible exodus of liquidity from crypto over the past few weeks as investors reposition to participate in AI.
The second seller is sovereign players. Major hedge funds and especially governments are under pressure. Because of geopolitical conflict — an Iran war — and the resulting high oil prices, sovereign holders are forced to sell their most speculative and most freely tradable assets. Bitcoin trades on weekends and is always open, which makes it the asset of choice to liquidate when a country needs cash to afford oil or to keep itself running. In times when people urgently need liquidity, Bitcoin has consistently been a source of it. These two forces — momentum-driven outflows and sovereign liquidation — are the primary drivers behind the recent decline.
A Quiet Signal Worth Noticing
Amid all this selling, there is a counter-signal that deserves attention. SpaceX itself owns 18,712 Bitcoin, worth more than $1.45 billion. It is worth pausing on what the most cutting-edge companies on Earth choose to accumulate and hold as their store of value. Bitcoin is not going to explode in valuation the way SpaceX might, but the decision of these companies to hold it tells you something about where they find lasting value.
At the same time, Bitcoin is now down roughly 53% from its peak last October — its biggest and longest drawdown since 2022. Drawdowns can always go deeper, and value investors may yet find better entry points. But historically, whenever the price approaches these levels, it has been a strong time to dollar-cost average for anyone willing to wait six, twelve, or eighteen months. The 200-week moving average has long marked value for a crypto asset with strong fundamentals and product-market fit. Critically, the fundamentals of Bitcoin and crypto have not changed — if anything, they are getting better — even as the price falls. That divergence is precisely what a value investor looks for.
The Data on Chasing Hot IPOs
This brings us to the central question: should anyone invest in a hot IPO in a hot market? The honest answer begins with humility. When you have no edge — no special knowledge that makes you more informed than the rest of the market — investing becomes a coin flip: 50% chance it goes up, 50% chance it goes down. A disciplined investor wants an edge before committing capital.
The broad expectation for SpaceX is that it will rally, and that it will also crash — and that this is not a bubble. History supports this pattern. Consider the hottest IPOs of past hot markets:
- Coinbase, launched in 2021 during a hot crypto market, dipped, rallied, and then six to twelve months later settled into its fair value.
- Meta (Facebook) launched in a hot market at around $38, then fell to roughly $19–$20 about six to twelve months later before finding its footing.
- Robinhood skyrocketed at launch, providing abundant exit liquidity for early investors, before retreating.
These are just three examples from a much longer list that includes Twitter, Alibaba, Shopify, Pinterest, Zoom, Dropbox, Roblox, DoorDash, and Palantir. The moral is consistent: do not chase hot IPOs. The year-one average drawdown across these names is 55%, and the median is 54%.
The Nuance Inside the Data
There are two important caveats. First, timing matters enormously. On average, one week after listing, companies were up — some by as much as 20% or 30%. One month later, most were still up. Three months out, many remained up, though some had already suffered major corrections. It was only at the six- and twelve-month marks that the median turned negative, as capital rotated away to chase momentum elsewhere.
Second, and most importantly, a large drawdown does not mean a disastrous year. Every single one of these companies experienced a maximum drawdown averaging 54–55% — some as shallow as 30%, some as deep as 70%. Yet they did not end the year down by that amount. On average, they finished the year only about 9% down, having rallied back from their lows. The lesson is that severe drawdowns and eventual recovery coexist. Expect a rally. Expect a crash. Recognize that neither alone tells the full story.
Value or Momentum — Or Both
Ultimately, every investor must answer a single question: am I a value investor or a momentum investor? Ideally, you do not have to choose just one. But the framing clarifies the present moment. The time to invest in artificial intelligence — at least the public-market version of it — was a year or two ago, before the hype. What will people be saying about crypto a year or two from now? They will likely call it the momentum trade. We have seen momentum in crypto many times before. Right now, by contrast, crypto is offering value.
That distinction is the heart of the strategy. The 200-week moving average tends to mark the bottom for assets with sound fundamentals. We could dip below it, and the liquidity squeeze may persist for several more months — because after SpaceX comes OpenAI, then Anthropic, and the constraint on liquidity continues. This does not have to resolve quickly. In fact, the investors who make the most money tend to be exceptionally good at doing nothing for long stretches of time. This patience — call it apathy, call it stillness — is the underrated skill of value investing.
For assets where the fundamentals have not changed and where one can be a genuine long-term believer — Bitcoin, Ethereum, and certain other cryptocurrencies — accumulating during periods of fear is the value play. At the same time, momentum investing in the AI buildout can be exhilarating, and that momentum could last the rest of the year. The two approaches are not mutually exclusive.
Conclusion
We are watching capital markets reorganize themselves around the largest equity issuance wave in living memory. The mega-IPOs of AI and aerospace are pulling liquidity out of every stable corner of the market, including crypto, and creating the downward pressure we see today. The data on hot IPOs counsels restraint: they rally, they crash, they suffer drawdowns of more than half their value, and they often end their first year roughly flat-to-modestly-down before momentum moves on. Meanwhile, the assets being sold to fund the frenzy — assets whose fundamentals remain intact — may be quietly entering value territory. The choice between chasing momentum and patiently buying value is, in the end, a choice about temperament. The week ahead carries major implications for what comes next in both AI and crypto, and the smartest move may simply be the discipline to know which kind of investor you are.