Was the SpaceX IPO Really to Blame for Bitcoin's Worst Week Since FTX?

**Austin Campbell** (0:00)
I'm gonna point to a different crisis that this kind of reminds me of, which is people buying an asset they thought was money good into an environment that was very unfriendly for that asset, and suddenly having cash flow needs. You know what story that is? Silicon Valley Bank.

**Ram Ahluwalia** (0:16)
Yes, 100%.

**Austin Campbell** (0:17)
Same thing, because if nobody had done anything, SVB was fine, but they had a depositor flight. In that case, MicroStrategy essentially has 1.7 billion depositor flight every year because of the dividends they have to pay. So they're on the clock.
Hey everyone, welcome to Bits and Bips, where we explore how crypto and macro collide one basis point, or I guess over this weekend, one point at a time. We're here to discuss the latest stories in the worlds of crypto and macro. But first, before we begin, a quick commercial break.

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**Austin Campbell** (2:10)
All right, everyone, as always, I'm your host, Austin Campbell, High Scholar of Zero Knowledge Group. I'm here with my two co-hosts, Ram Ahluwalia, Maester of Wealth, the leader of Lumida, and Chris Perkins, the golden hand of 250 Digital. So first, a quick programming note. We moved Bits and Bips to its new channels. So the full interviews and this show are on the dedicated channels. If you haven't already, subscribe to the channels on X, on YouTube, on Spotify, on Apple podcasts, or wherever you get your podcasts. And with that said, let's talk about the market action this weekend, guys. So we're starting with this segment titled Is AI Eating Crypto's Bid as a Place to Start? Because a lot has gone down. Crypto just logged its worst week since the FTX collapse. Bitcoin was down 17%.
ETH was down 22%.
We lost about a third of a trillion of total market cap. The SpaceX IPO is coming, allegedly a 75 billion raise at a 1.77 trillion valuation.
But is that what's draining crypto or is this a myth? So let's start with the people talking liquidity drain. So Lashmi said, where do you think the liquidity for a 75 billion raise is going to come from? Expect a bloodbath. People selling shares, selling crypto, liquidating everything to get a piece of the biggest IPO in history. And I will remind everybody at that point that SpaceX has been marketing aggressively to retail as well. This is not solely an institutional one. Another comment, 75 billion in SpaceX shares need to be absorbed on June 12th. To raise cash, you sell what you already own. Retail sees Elon hype. I see the force selling that pays for it from ZeroX Pepe SSO. Now, there are some others who pushed back. Friend of the show, Eric Beltranis, shocker, the S&P will not fast track SpaceX, so it will take at least a year. Every other big boy index is 5 to 15 days, but this is an index mechanics play and will create significant return dispersion between passive indices. Choose wisely.
Kathy Wood, SpaceX is not the only one. This is a broader IPO wave. It's philanthropic, data bricks, we know there are rumors of open AI, and the median US company is now 12 years old at IPO versus 5 So the most value is created before a company lists. But Ram, I want to start with you. You have a lot of experience investing in public markets. What are you making of this price action in front of the SpaceX IPO? Is that the driver or is something else going on?

**Ram Ahluwalia** (5:00)
Well, starting off with Bitcoin, the primary issue there is that the marginal bid was microstrategy. And we talked about this about one or two months ago. It's like when those preferred security products trade below par value, then the capital flywheel that issues new securities to then buy Bitcoin stops. So STRF and STRC have a significant discount to NAV.