Chinese investors use crypto to bet on SpaceX IPO

Chinese Investors Turn to Crypto Derivatives for Exposure to US Tech IPOs

Chinese investors, shut out of marquee US tech listings like SpaceX’s forthcoming initial public offering, are increasingly using cryptocurrency derivatives to simulate exposure to these deals — circumventing Beijing’s capital controls through a burgeoning market of synthetic financial products, the Financial Times reported on Tuesday.ft

Locked Out of the Biggest IPO in History

The workaround has gained urgency as SpaceX’s underwriters barred investors in China and Hong Kong from participating in what is expected to be the largest IPO ever, with a target raise of $75 billion. Bloomberg first reported on June 5 that lead banks instructed syndicate members not to accept orders from customers in those regions due to regulatory and compliance concerns tied to US export controls. A Reuters review the same day found that SpaceX’s website and IPO marketing documents returned “Error 1009” access blocks when viewed from mainland China and Hong Kong.yahoo

The exclusion comes amid a sweeping Chinese regulatory crackdown on cross-border securities activity. On May 22, the China Securities Regulatory Commission and seven other government bodies ordered overseas brokers — including Tiger Brokers, Futu, and Longbridge — to cease “illegal” operations serving mainland clients within two years. The CSRC later reassured investors that existing accounts would not be forcibly liquidated.reuters

A Synthetic Market Emerges

Into this vacuum, crypto exchanges have rushed to offer pre-IPO perpetual futures contracts. Binance launched its SPCXUSDT contract on May 21, allowing traders to speculate on SpaceX’s anticipated valuation with up to 5x leverage — no equity ownership required. Coinbase followed on June 4 with its own SpaceX-linked perpetual futures settled in USDC, available exclusively to traders outside the United States. Crypto.com introduced pre-IPO perpetuals tied to OpenAI, SpaceX, and Anthropic on June 9.binance

These synthetic instruments track private-market valuations derived from secondary trades and S-1 filing data, transitioning to public share prices once an IPO occurs. For Chinese investors facing tightened capital outflow channels, the products represent a new route to speculate on high-profile American technology companies.bingx

Risks and Regulatory Uncertainty

The maneuvers carry considerable risk. The instruments offer no equity ownership, are subject to volatile crypto-market dynamics, and could draw further scrutiny from Chinese regulators already targeting underground banking networks and illicit capital outflows. The CSRC’s broader campaign now extends to internet platforms and social media accounts publishing promotional content for unauthorized cross-border investment services.businesstimes

As one channel closes, another opens — but with the regulatory net tightening on both sides of the Pacific, the window for these crypto-based workarounds may prove narrow.