Author: Jae, PANews

On May 28, less than a month before SpaceX's Nasdaq listing, and amidst soaring market enthusiasm, its pre-IPO assets experienced a series of "cliff-like crashes" overnight: the price of preSPCX stock tokens on Bitget plummeted by about 80% at one point; SpaceX perpetual contracts on Hyperliquid (a decentralized perpetual contract exchange) on Perp DEX (a decentralized perpetual contract exchange) crashed by 45% in 30 minutes, resulting in over 400 retail investors being liquidated and forced to exit the market.

Even before SpaceX's IPO bell rang, the market had already written a warning note for pre-IPO assets.

Bitget: 80% Plunge, But the Truth is a Token Split

Yesterday, many traders glued to their computer screens gasped in shock. The preSPCX/USDT spot trading pair on Bitget experienced a sudden 80% drop in price, a sharp decline. Such volatility could easily lead uninformed investors to believe that the exchange was manipulating the price to fleece them.

According to PANews' investigation, this "plummeting" was not actually due to a sudden deterioration in the asset's fundamentals; the truth was that it was a pre-announced token split.

According to the official announcement released by Bitget, the platform suspended trading of the original Pre-IPO stock token preSPAX at 2 pm on May 28 and implemented a split at a ratio of 1:5. After the split, the underlying token code was updated to preSPCX.

A 1:5 split means that the number of tokens held by an investor is multiplied by 5. Assuming the total value of the holdings remains unchanged, the price per token after the split is reduced to one-fifth of the original price, which translates to a nominal price drop of 80% on the trading screen.

Based on the trading price of around $900 at the time, the adjusted price after the split was approximately $180.

Although this was a simple technical adjustment on paper, after trading was reopened, the candlestick chart on the trading interface did not reflect historical prices in sync, resulting in a visual "plummeting" appearance on the market.

For inexperienced, emotionally sensitive, or informationally disadvantaged retail investors, this visual shock may be misinterpreted as an "asset collapse."

Hyperliquid: 45% flash crash in 30 minutes, oracle malfunction triggers domino liquidation

Compared to Bitget's "technical adjustment," the flash crash of SPACEEX perpetual contracts on Hyperliquid was a real disaster caused by oracle errors, scarce liquidity, and leveraged panic selling.

Last night at 11 PM, the SPACEX-USDH contract on the HIP-3 Virtuals market plummeted from $2,277 to a low of $1,254 in just 7 minutes, a drop of 45%, nearly halved. Although the price quickly recovered to around $2,200 within the next 10 minutes, the position clearing was complete, and the long positions suffered heavy losses.

As a result, 1,393 positions held by 405 users were forcibly liquidated, resulting in a total nominal loss of approximately $1.51 million. The median margin of the liquidated positions was only $31, and the market participants were mainly retail investors.

The flash crash was caused by an abnormal liquidation due to an oracle price feed error. According to Ventuals, the perpetual contract platform within the Hyperliquid ecosystem, the incident was caused by an incorrect data provider returned by the off-chain data provider used by the oracle component. This caused significant fluctuations in the market oracle price and the token price, triggering the forced liquidation of some user positions. Emergency measures have been taken, and the development team is assessing the impact on users. Ventuals later updated the report, stating that affected users will receive compensation within the next 48 hours.

Meanwhile, the deeper reason for this plunge lies in the fact that pre-IPO assets generally suffer from insufficient order book depth and fragile market liquidity. Coupled with the cascading collapse of retail investor leverage, this further amplified the market stampede effect and accelerated the spread of the decline.

This is a rather "shallow" betting line, like a pond that only reaches your ankles; if you throw a slightly larger stone in, it will create a lot of splashes.

In a market with less than $3 million in open interest and a 24-hour trading volume of just over $4 million, a sell order of several hundred thousand dollars is enough to wipe out a large number of buy orders in an instant; as prices fall, the bulls trigger liquidation lines, and the market price is dumped, further breaking through deeper price support; the liquidity crunch in the middle of the night triggers a domino effect.

In less than 20 minutes, a leveraged game turned into a forced exit for retail investors.

Conclusion

Undeniably, pre-IPO assets represent one of the most imaginative innovative directions in the crypto industry: allowing ordinary people, outside the high walls of the private equity market, to access the value projections of top unicorns ahead of time. In a sense, this expands the boundaries of market participation and provides a new price discovery mechanism for non-public assets.

However, before real assets are officially listed on the public market and trading depth is fully developed, these assets are destined to be characterized by high volatility, high speculation, and distorted pricing. Due to the lack of a unified valuation benchmark, mature arbitrage mechanisms, and sufficient market depth, their prices are often more susceptible to the amplified influence of sentiment, liquidity, and leveraged funds. The dramatic fluctuations in SpaceX's synthetic assets have once again exposed the vulnerability of pre-IPO products in the market.

As more popular unicorns are brought onto the blockchain in the future, more speculative funds will continue to flow in. Whether the pre-IPO sector can establish a more mature pricing mechanism, liquidity system, and risk control framework will remain a problem that the industry needs to continue to face.