Author: Arkstream Capital

TL;DR

In Q1 2026, weekly trading volume of commodity perpetual contracts (gold, silver, crude oil) on cryptocurrency exchanges surged from $38.1 million to $25 billion, an increase of 65,463%. Tokenization of traditional assets will be the main theme of Crypto over the next 5-10 years, while pre-IPO tokenization is just the latest category to join the fray in this wave.

In April, three leading exchanges—Bitget, Gate, and Binance (PreStocks)—almost simultaneously launched SpaceX-related tokenized products. While their compliance methods differed, the essence was the same: breaking down the pre-IPO market share, previously only available to ultra-high-net-worth clients, into smaller pieces and selling them to retail investors.

This article mainly clarifies two things: first, what exactly is traditional Pre-IPO, and second, how retail investors can participate.

Tokenization of traditional assets will be the main theme of Crypto over the next 5-10 years.

According to statistics, in Q1 2026, the weekly trading volume of commodity perpetual contracts (gold, silver, and crude oil) on cryptocurrency exchanges surged from $38.1 million to $25 billion, an increase of 65,463%. After Binance launched its TradeFi Perpetual section in January, its cumulative trading volume exceeded $153 billion and the number of transactions exceeded 114 million in three months; its XAG (silver) contract had an average daily trading volume of $1.31 billion, and its global market share surged from 0.2% to 4.9% (an increase of 23.5 times).

The most notable event was the Iran-Iraq War at the end of February. The US and Israel's strikes against Iran occurred over the weekend, and traditional futures, stocks, and forex markets were all closed. Only the cryptocurrency market remained open for trading globally. At that time, Hyperliquid's crude oil perpetual surged by 5%, Tether's gold XAUT saw a single-day trading volume exceeding $300 million, and Bitwise's CIO described it as "the weekend that changed finance."

US stocks, precious metals, crude oil, and foreign exchange—assets that were previously traded only from 9 am to 4 pm on weekdays—are being tokenized, put on-chain, and provided with 24/7 global liquidity. Pre-IPO tokenization is just the latest category to join this wave.

Source: BitMEX Research

What exactly is Pre-IPO?

The pre-IPO secondary market (trading of existing shares) has existed for over a decade, with global trading volume reaching $160 billion in 2024, of which $61.1 billion came from the US direct secondary market alone. Buyers are primarily private offices, sovereign wealth funds, institutional investors, and high-net-worth individuals, with individual transactions typically exceeding $10 million, effectively excluding retail investors.

The vast majority of transactions are conducted through SPVs (Special Purpose Vehicles): the original shareholders place their shares into a specially established shell company, which then sells its shares to new buyers. The buyers acquire shares in the SPV, indirectly holding shares in the underlying company. This is because transactions involving existing shares rarely involve strangers directly entering the cap table (company's shareholder register), as this would trigger other shareholders' ROFRs (Right of First Refusal), a cumbersome process that could be blocked by the original shareholders. Therefore, what the buyer ultimately acquires and holds is the LP interest or units of the SPV, essentially indirectly holding the rights to the existing shares.

Because secondary market trading is highly concentrated on a small number of top-tier stocks, US AI/space giants like SpaceX, OpenAI, and Anthropic have long accounted for 30-40% of trading volume. Adding to this the leading unicorns like ByteDance, Stripe, Databricks, and xAI, the top 15 companies alone capture approximately 83% of the market's trading volume. (This concentration also explains why, even though Bitget/Gate only issued SpaceX tokens this time, they easily raised over $100 million; the supply of top-tier pre-IPO tokens remains scarce, while demand is highly concentrated.)

The vast majority of these are US-listed companies, making CFIUS (Committee on Foreign Investment in the United States) the biggest regulatory hurdle. It restricts foreign investment in sensitive US sectors (AI, semiconductors, defense), and investments from certain countries in SpaceX/Anthropic are subject to strict scrutiny. Therefore, before a transaction, sellers typically stipulate that UBOs from certain countries are not allowed to purchase—the GP will trace through the SPV to check if the ultimate controlling shareholder of the buyer is a restricted nationality such as China, Russia, or Iran. The deeper the layers, the harder it is to investigate, but it's not foolproof. We previously encountered a case where a Chinese UBO was discovered in two layers of SPVs, causing the entire deal to fall through.

Sources: Caplight PitchBook, Augment

In the US, there's a standard lock-up period after an IPO: SEC Rule 144, combined with the underwriters' agreement, stipulates that early shareholders and employees cannot sell their shares on the open market for six months after the IPO. This rule applies to almost all US companies (Facebook, Coinbase, Reddit, and Cerebras all follow this six-month period). This is why Bitget/Gate's pre-IPO tokens will only be redeemed in six months, but it doesn't affect pre-market trading.

Sharing real transaction details of pre-IPO

Ticket size threshold is extremely high.

Traditionally, pre-IPO ticket sizes start at around $10 million, with virtually no one willing to take on deals below $1 million—not because they don't want to, but because the fixed costs per transaction (legal fees, KYC, SPV setup, and distribution fees) are prohibitive. Therefore, this move by exchanges is a disruptive attempt, breaking down class barriers. Previously, retail investors (and only advanced players with US stock accounts, etc.) could only participate in trading after the IPO. Now, while exchanges are more expensive, they at least give ordinary people the opportunity to participate.

Broker/FA Chaos

A cross-border pre-IPO deal typically involves multiple layers:

Bottom-level GP - Rep (Seller Representative) - Tier 1 Broker - Tier 2 Broker - ... - FA - Client

Add 1-5% fee to each layer. A deal with a base value of $500B might end up costing over $600B when it reaches the actual buyer.

Take SpaceX as an example. The actual market value is approximately $1.25T, plus an access fee of 3-11% (depending on the channel and tier), meaning the final price would be around $1.375T. This doesn't even include the compliance fees for tokenization. Overall, the price offered by the exchange seems fair, likely for the purpose of attracting new users.

Moreover, most of the block supply in the market is fake—the same batch of shares is repeatedly listed by multiple brokers, and less than 10% can actually be traded. For example, SpaceX was listed on the platform with a valuation of $1.2T, but after in-depth communication, it turned out to be a fake listing. Even large platforms and intermediaries are full of this kind of situation.

Sources: A certain old stock trading platform

If the transaction involves LP interest swaps, you also need to obtain GP Consent, which is the GP of the underlying SPV's right to consent to the transfer of LP shares. The GP has the right to refuse. The reality in the industry is that GPs are not very welcoming of such transfers—because vetting new LPs, doing compliance, and introducing strangers are all troublesome, so in many cases, it is necessary to bribe the GP to do things, which adds another layer of costs.

Poor liquidity is the biggest pain point for pre-IPO existing shares.

It's extremely difficult to sell midway. You either have to wait for the company's IPO (usually 3-7 years), and then there's usually a 6-month lock-up period after the IPO. Or you have to find a buyer again and go through the structured process again—two to three weeks (at the fastest) plus financial advisory fees.

Each transfer of ownership is a separate OTC transaction, requiring the redoing of legal documents, KYC/AML/UBO due diligence, and GP approval. This is why pre-IPO companies are consistently priced as "illiquid assets."

How can ordinary people participate in this round of pre-IPO?

It can be predicted that a series of tokenized products based on existing shares will appear in the market in the future. They are all essentially the same thing: the platform buys real existing shares in the traditional pre-IPO market, and then breaks them down into fragments using token shells and sells them to retail investors.

For ordinary people, this means gaining the opportunity to enter the company in rounds before its IPO, and then seeing the valuation naturally rise with each round.

Valuations of top-tier companies typically rise steadily after each funding round. SpaceX's valuation has increased from $74 billion in 2021 to over $1.4 trillion now, OpenAI's from $29 billion to over $852 billion, Anthropic's from $4 billion to over $800 billion, and ByteDance's from $75 billion to over $600 billion. Each new funding round inflates the valuation, and existing shareholders benefit accordingly.

But one thing must be clear: this is not a guaranteed profit. Historically, Stripe experienced a downturn, with its valuation halved from $95 billion to $50 billion; TrueLayer fell by over 30%; Cyberreason fell by over 90%; and WeWork went bankrupt from a valuation of $49 billion. In 2023, 128 unicorns globally saw their valuations decline, and 42 were removed from the unicorn list altogether.

Therefore, the key to participating in Pre-IPO is selecting targets, not betting on market timings. It's about earning long-term returns by following the natural rise in company valuations—not rushing to buy on the first day of listing and trying to profit from short-term market fluctuations driven by sentiment. Many cryptocurrency users treat Pre-IPO like cryptocurrency IDOs, but these are two completely different logics.

To summarize the participation logic:

1. Are you optimistic about this stock in the long term? Is SpaceX/OpenAI/Anthropic worth its post-IPO valuation? Are you willing to hold it until the next round of fundraising or after the IPO?

Second, is this product safe? Who is the issuer? Where is the safety net? Who can be held responsible if something goes wrong?

The RWA pattern in the next 3 years

The RWA transformation of pre-IPO companies is still in its very early stages. Leading companies are experiencing a shortage of supply, highly concentrated demand, and long-term upward valuations. In the coming months, tokenized products from leading companies such as OpenAI, Anthropic, xAI, Stripe, ByteDance, and Kimi will emerge one after another.

This is just a small branch of the entire tokenization process. The main four-layer structure can be clearly foreseen at present:

• Stablecoin issuers: providing on-chain USD and settlement gateways

• Public blockchain network: facilitating asset issuance and circulation

• Trading and distribution platforms: CEX, DEX. We also believe there's another potential player: LaunchPad/IDO platforms (such as Buidlpad). They already possess the full capabilities for new asset KYC, issuance, subscription, and distribution. Having issued crypto tokens in the past, they could easily issue pre-IPO tokens today.

• Asset issuance service provider: A service company that puts various assets on the blockchain.

It is foreseeable that the tokenization trend will not only give rise to a batch of unicorns, but also has the potential to breed new trillion-dollar infrastructure and a group of platform players worth hundreds of billions.

Everything is just beginning.